Microsoft is Simplifying the Business of Electronic Commerce

SAN FRANCISCO, March 4, 1999 — Aspiring to create another shopping avenue for its customers, Florida-based office supplies giant Office Depot, Inc., last year deployed an e-commerce Web site. The company, which has a nationwide network of nearly 700 stores, expects the Web site to generate a significant portion of its business. Already, the site is pulling in an average of 25,000 visits a day, and has helped Office Depot establish new accounts with more than 37,000 customers.

“The growing acceptance of electronic commerce among our corporate customers, the widespread use of the Web, and the fact that we want to continue to be the lowest-cost supplies leader led us to create our public Web site,” said Paul Gaffney, Office Depot’s senior vice president for systems development.

Like Office Depot, many businesses are discovering the benefits that e-commerce offers. But while the popularity of e-commerce is increasing rapidly, the cost and complexity of deploying Web sites has deterred some companies from taking their business online. What’s more, concerns about privacy and problems finding and comparing products online have dissuaded some consumers from shopping over the Internet.

In an effort to overcome these obstacles, Microsoft today announced a comprehensive e-commerce strategy to make it easier for companies and consumers to conduct business over the Internet. At a press briefing in San Francisco, Microsoft announced an expanded e-commerce solution that includes new software and services designed to transform the Web into a bustling marketplace. Microsoft’s strategy is intended to help businesses quickly and cost-effectively build Web sites, promote their products and services to qualified customers, and trade with business partners over the Internet. It will also provide an improved, more convenient experience for consumers who shop online.

“We have a vision, which is to enable e-commerce for everyone,” said Rich Tong, vice president of applications marketing for Microsoft. “Our vision is a world where there’s ubiquitous participation in e-commerce by businesses of all sizes and consumers.”

E-commerce is already taking off. Businesses are building public Web sites to sell their products and goods to consumers. They’re creating internal self-service Web sites to let employees buy company supplies and services directly over the Internet. And they’re creating private Web sites with their partners to make it easier to transact business with their suppliers and distributors. Experts estimate that uses such as these will quadruple e-commerce related spending from about $12 billion this year to $44 billion worldwide by 2002.

While e-commerce is catching on quickly, businesses still find it difficult to share purchase orders, invoices and other data reliably and securely with their trading partners over the Internet. In addition, the complexity and cost of deploying Web sites are preventing some companies-particularly small businesses-from using this new avenue for commerce.

“Today’s tools and applications are really targeted at developers, and not at business users,” Tong said. “Among small businesses, it’s an even bigger problem. Small businesses need simple, out-sourced services that give them an online presence, the marketing they need to reach customers, and simple payment and order processing capabilities.”

E-commerce is also starting to catch on among consumers, who want the convenience of shopping 24 hours a day. Experts predict that 50 percent of U.S. households that have Internet access will make purchases online by the end of this year. Despite the projected growth, fears about their personal information falling into the wrong hands, as well as the inconvenience of finding products over the Internet, are still preventing some consumers from shopping online, Tong said.

“When you search for a product like a camera, you enter ‘digital camera’ in a search engine, and you get all sorts of information sent back to you that does not specifically help you find different manufacturers or choose and compare these cameras,” said Tong. “You get random Web sites, random articles and all kinds of stuff. So it’s still far too hard and inconvenient for consumers to find the products they want. And it’s very difficult to learn of promotions that meet your interests.”

Microsoft’s e-commerce solution includes new software and services designed to overcome these barriers. The company announced BizTalk, a new framework that makes it easier for companies to integrate software applications and exchange data with suppliers, distributors and other business partners. BizTalk is based on Extensible Markup Language (XML) schemas and industry standards, and will enable businesses to integrate their applications with those of their trading partners regardless of the platform, operating system or technology on which these systems are based. Microsoft announced plans to incorporate BizTalk into its commerce platform, future versions of Office, BackOffice and Windows, and MSN.

“Today, companies traditionally share information through Electronic Data Interchange (EDI), which requires a lot of custom agreements between the companies and a lot of work to translate formats that house the data the companies want to share,” Tong said. “BizTalk will make it a lot simpler and less expensive for businesses to link up with partners, both within their industry and across industries.”

Microsoft also announced an expanded e-commerce platform that includes three new products and services. Microsoft BizTalk Server is new technology that will make it easier for companies to take advantage of BizTalk. By doing so, it will enable companies to share data over the Internet more easily. Microsoft Commerce Server, which builds upon Microsoft Site Server 3.0 Commerce Edition, will make it easier for business and marketing managers to deploy and maintain sophisticated e-commerce Web sites. Small Business Commerce Services is a new offering by Microsoft that will enable small businesses to quickly build a Web site, promote their business and sell their products over the Internet. Beta versions of all three products will be available during the second half of 1999.

To augment its new offerings, Microsoft announced it will join with MasterCard International and Clarus Corporation to offer companies a corporate-purchasing solution. The agreement combines Microsoft’s commerce platform, Clarus’ electronic procurement solution and MasterCard’s credit card payment system to make it simpler for companies to purchase goods and services over the Internet. “It’s an integrated solution so that a company won’t have to get its credit card payment system from one vendor, its procurement software from another and its commerce platform from a third,” Tong said.

Finally, Microsoft announced it will broaden its offerings on the MSN Web site with the goal of making it the premier marketplace on the Internet. By adding new services and providing in-depth information on a wide array of products and services, Microsoft aims to create a comprehensive shopping experience for buyers and sellers.

Businesses will be able to use the BizTalk framework to publish up-to-the-minute information about their products and promotions on MSN. And consumers will be able to read product reviews, learn about special promotions and compare the features, prices and other attributes of products that interest them. To make it easier for consumers to make spending decisions, Microsoft announced it has acquired CompareNet, an online resource for consumers to find and compare products. The company also announced Microsoft Passport, a single sign-in and registration system intended to make it easier for consumers to log on to Web sites while protecting their personal information. “Rather than having to remember multiple passwords, it’s a single password that will work on multiple Web sites,” Tong explained.

Microsoft’s expanded offerings build upon the company’s existing commerce platform, which is made up of Windows NT Server 4.0 operating system, Site Server Commerce Edition version 3.0 server technology and Microsoft’s SQL Server 7.0 database. Support for this platform has grown over the past several months, Tong said. For example, more than 100 leading software developers are creating applications based upon Microsoft’s commerce platform. In addition, thousands of consultants that help businesses create Web sites are basing these sites on Microsoft technology.

Microsoft’s expanded offerings are already drawing the support of other software companies. For example, PeopleSoft announced it will base its new electronic business network on the Microsoft platform. And SAP AG has announced support for BizTalk as well as an expanded relationship with Microsoft in the e-commerce arena.

Most important, companies of all sizes say Microsoft’s expanded e-commerce solution will make it easier to take advantage of business opportunities over the Internet. “Implementing the right commerce strategy is a tremendous challenge for Office Depot,” said Beth VanStory, vice president of online at Office Depot. “Microsoft’s strategy provides a complete offering of the software and services we need, while BizTalk provides a common architecture for us and our partners to rally around.”

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