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Microsoft Battles for Enterprise Acceptance of .NET
The mid-market is embracing the behemoth's architecture, but enterprise vendors are opting for Java-based development to implement Web services.
For the rest of the October 2002 issue of CRM magazine please click here
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There are few things that technology providers, industry watchers, analysts, and users can actually agree on, but the idea of Web services seems to have united all constituencies. Loosely defined, a Web service is a way of developing software to expose some business functionality over the Internet using the SOAP protocol. Web services are portable, interoperable, and not tied to any one vendor, which is what makes them so useful. For the end users of the technology this mean streamlined services. For example, a travel site could link to car rental agencies, hotels, and airlines, allowing a customer book all their vacation reservations at the same time. If one of the requests cannot successfully be booked, the other requests will not be completed and the user will be prompted to file a new travel request. So, while the broad definition of what Web services can do is generally accepted and is eagerly anticipated, the specifics of what makes up a Web service are subject to multiple interpretations and heated debate. In addition, there is contention over which platform and what tools are superior for creating applications and services. Should vendors be developing such services using Microsoft Corp.'s .NET framework or Sun Microsystems Inc.'s Java 2 Enterprise Edition (J2EE) platform? While there is no clear answer, there is also no shortage of verbal jousting and opinions on the subject. Nowhere is the .NET versus J2EE battle more heated than in the CRM space. With Microsoft set to unleash its entry into the small and medium-size CRM market by the end of the year--and that offering being the software giant's first .NET-enabled application--the stakes are even higher. And while the mid-market appears ripe for the platform, just how far .NET will penetrate into the enterprise is a raging debate. In July Microsoft Chief Executive Steve Ballmer said the Web services phenomenon has only just begun. "This is a long-term thing, but it's big, big, big, big, big, the biggest thing that's going to happen in the industry, and we're committed to it," Ballmer said. In fact, Microsoft has spent the past two years delivering its ambitious .NET framework. But some industry watchers have jokingly referred to Microsoft's .NET strategy as "Not Yet."
At a conference in July Microsoft Chairman Bill Gates stated that building the company's .NET architecture has been more difficult than "getting to the moon or designing the 747." He also admitted that consumers, corporate executives, and investors are having a hard time grasping .NET and that Microsoft has not done a good job explaining the technology. Microsoft is now trying to clear up this confusion, says Darren Laybourn, vice president of .NET for Microsoft's Business Solutions group, in Fargo, N.D. "We are now looking at it as more of a feature attribute and we are creating a logo program that will take full advantage of that," he says. One analyst says Microsoft's reputation will be enough to give the company a chance to simplify its intentions. "Microsoft has done a bad job of articulating what .NET is. However, everyone knows Microsoft and what it is. That is more than enough to get [the company] in the door with large businesses," says Rebecca Wettemann, vice president of research at Wellesley, Mass.--based Nucleus Research. Regardless of the confusion .NET is a step towards the dream, says UpShot Corp. Chairman and Founder Keith Raffel. "Applications that can seamlessly tie into other services. It's hard to argue against that," he says. And very few in the mid-market CRM space are. Many mid-market CRM vendors, including UpShot, have already or are about to deliver .NET versions of their products. "It's just what the mid-market is looking for," says Mitch Kramer, an analyst at the Patricia Seybold Group, a market researcher and consultancy in Boston. "It's lower cost and easier to implement than competing technologies. Also, mid-market companies tend to have smaller IT staffs with limited skills. Unix and J2EE are expensive to buy and implement. Actually, it's going to be hard to justify selling a mid-market product that isn't based on .Net," he says. Pivotal executives believe that .NET is ideally suited for most mid-market companies, because it is the most cost-effective, flexible platform to meet their business needs. Specifically, Pivotal is leveraging BizTalk Server, Microsoft Transaction Server, SQL Server, Commerce Server, and Visual Studio .NET tools, including C+. The company says .NET allows midsize enterprises to take advantage of cost-effective CRM technologies, enabling them to begin or expand their CRM initiatives. Epicor is one such company that is "absolutely full-bore into .NET" for the same reasons, says Greg Horton, director of product marketing for Epicor's Clientele Group. The company's Clientele Customer Support 8.0 product is slated for release in the fourth quarter of this year. "Our experience has been that medium-size businesses traditionally use Microsoft tools and Microsoft platforms, and that means that is where we are going," Horton says, adding that .NET does not need the big enterprises to be considered a success. "Remember the Fortune 1,000 has only 1,000 members. There are thousands of small to medium-size businesses out there. It's like Mercedes versus Toyota. Many wealthy people choose to buy Mercedes, but I doubt anyone would say Toyota is not successful." The consensus is that there are more than 45,000 companies and business units in the mid-market. Gartner research director Joe Outlaw estimates that only about 20 percent has already deployed a CRM solution. That makes the mid-market ripe with potential. Howard Keziah, Impact Technologies chairman and chief technology officer says .NET has enabled his company to develop products four times faster than with previous development tools. Keziah proudly says that over the past 20 years Impact has been at the forefront of adopting many promising development technologies. "We looked at .NET and realized that we could get such a development boost that we switched our entire development over to it," Keziah says. "We were able to shift from monolithic applications to the common mode of delivery of applications that are constellations of services," Keziah says. "These apps work together to create more robust solutions. It also lets our clients choose best-of-breed services." Denis Pombriant, a research analyst at Aberdeen, agrees. "The advent of CRM applications truly based on open standards will usher in a new era of best-of-breed applications," he says. This may be striking fear in some larger CRM players. "[When Web-native apps are fully integrated with XML data feeds] the SAPs, PeopleSofts, and Siebels of this world will be running scared," says Karen Moser, research manager at market researcher IDC. Oracle Corp., SAP AG, and PeopleSoft Inc. have opted to develop products based on Java or J2EE. Their contention is that enterprises are not adopting .Net. However, Siebel Systems is planning to support both .Net and J2EE, according to Tom Siebel, chairman and chief executive of Siebel Systems. "It is true that SAP, Oracle, and PeopleSoft have publicly rejected .Net. I am baffled by that. Siebel products will embrace the .Net application servers and the J2EE servers. We will work very closely with IBM and with Microsoft," he says. J2EE, which can run on a variety of Linux and Unix servers, is another component-based model that simplifies enterprise development and deployment of multitier enterprise applications that are based on standardized, modular components and provide a complete set of services to those components. All the details of application behavior are handled automatically, without complex programming. Nucleus Research's Wettemann speculates that many enterprise CRM vendors shunned .NET not because the technology is not appropriate for enterprise customers, but rather because it is a strategy to protect their market place from becoming dominated by Microsoft. But others say the enterprise vendors are scared of the high level of integration promised by .NET-enabled products, because it is similar if not beyond what is offered by enterprise CRM suite vendors, according to Mike Doyle, chairman and chief executive of Salesnet, which offers a Web services API built using .NET to enable integration between its sales force automation solution and other CRM applications. "I've been looking at the enterprise vendors and I don't see .NET at all," Patricia Seybold Group's Kramer says. "Most of the big players are using J2EE. They all need to create applications that can run on a variety of platforms and not be locked in only running on Microsoft 2000 or NT. These CRM vendors are saying they need portability and consistency." David Strauss, senior vice president of worldwide marketing at Chordiant Software Inc., says his company is focusing on J2EE rather than .NET because of customer demand. Chordiant provides CRM applications to business-to-consumer firms, such as banks and insurance companies. "Not one of our customers has asked us about .Net," he says. However, Strauss praises Microsoft, saying that indirectly .NET will impact the enterprise, because it will enable Microsoft's office productivity applications, including Word, Excel, and Outlook, to have better sharing of files and services. "I love Microsoft. It has great products and I expect that .NET will be a success in the mid-market," Strauss says. Similarly, Joel Reed, director of CRM marketing at J.D. Edwards says it is evaluating how .NET might fit into the company's development plan. However, for its CRM products, J.D. Edwards will continue to use J2EE, which the company has used since 1998. "[J2EE] is the platform we built our CRM products on, and it's what the customer base is going to require. To date J2EE is what our customers are looking for," Reed says, who notes that the bulk of users of J.D. Edwards' CRM products are at the low end of the enterprise and the high-end of the mid-market. Reliability and complexity is an issue for their customers and .Net has yet to be proven as a solution that will keep applications up and running 24/7, he says. "We are dealing with complex businesses and they can't afford to buy something that may not work," Reed says. "These are businesses that need integration on a deeper level of transaction processing. For enterprise businesses this is not about merging files but transactions. There is a big difference. You can't reboot the enterprise." Reed does leave room to speculate that there may be a little chicken-and-egg thing going on with regards to .NET. "Change is slower in this market. The market is not going to move without the applications, and applications will be slow to come if the market isn't there," he says. Craig Downing, vice president of product management at ACCPAC, says that his users are not asking for J2EE or .NET, but rather just looking to solve a specific problem regardless of the underlying architecture. However, ACCPAC is using J2EE and Java Script for its CRM solution, because of the scalability and portability. Others are hedging their bets. Take E.piphany Inc., for example. Although the vendor touts its position as delivering the first full-service, J2EE-based CRM suite, James Ferguson, director of product management says of .NET, "I wouldn't say we aren't doing it." "Our direction is using J2EE on the development side, but from a customer deployment side we are integrating our CRM with other applications through Web services. We see Web services as an up-and-coming and pervasive way for applications to talk to each other," Ferguson says, adding that it is unlikely that users will be forced to choose between using J2EE and .NET. Michael Boyd, IT technical project leader for Fujitsu PC in Memphis, says he likes to have choice. "I just want to get my job done in the easiest way possible," says Boyd, who has been beta testing the .NET version of Epicor Clientele 8.0 since March. Fujitsu has a license for 104 users, and is currently using the .NET-based solution as part of its service and support for call tracking for its warehouse and repair centers. Boyd says the .NET-based application from Epicor has enabled it to "wrap into the company's accounting package without going around the world to find a easy way to do it." He also says the company is using the application to expand to its customers and partners, and allow them to look at Fujitsu's order system, and that so far he is pleased with the results.
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