Netscape's code giveaway won't kill Microsoft

N etscape's proposed giveaway of its Communicator source code is a bold move. However, it is unlikely to stall Microsoft's momentum in the browser wars.

Netscape's gambit is a return to the company's roots in the traditional Internet research and development community, in which free source code is exchanged as casually as the morning's sports section. The radical twist is that Netscape is releasing source code for a mainstream commercial software product.

As you would expect, Netscape will keep close tabs on how licensees deploy its source code. It is building a new internal organization, Mozilla (www.mozilla.org), to publish code, supply technical documentation, operate discussion forums, maintain bug lists and track third-party enhancement projects. Mozilla is not a charitable enterprise, but a strategic effort to leverage the Netscape brand and technology through third-party industry resources.

Netscape just may succeed in its effort to transform its technology into the industry's de facto substrate for browser-based applications. Its offer of potent source code may launch a thousand new products stuffed with Navigator guts. Some Internet service providers will license the Mozilla code for no other reason than to send a signal to Microsoft that they won't kowtow to a monopoly provider. Independent software vendors (ISV) and corporate developers will latch onto Mozilla as a quick and cheap code base for specialized Web, mail, collaboration, push and other client applications. Even my 10-year-old son has vowed to take up C programming in order to craft a kid's browser from Mozilla code.

The Mozilla free source code programs popular acceptance would be good news for enterprises that have standardized on Netscape client software and have watched Microsofts encroaching market share with mounting dread. Netscape clients would remain ubiquitous and thereby could withstand challenges from Microsofts Internet Explorer and Active Desktop. Communicator would have a new lease on life and perhaps become a seedbed for innovative third-party browsing and collaboration technologies.

However, Netscape's source code giveaway also could be regarded as an admission of defeat. The company has failed miserably in its attempt to dislodge Microsoft as the be-all provider of desktop applications for network-centric computing. Netscape has watched Microsoft annihilate the market for stand-alone browsers through aggressive pricing and bundling practices. Netscape badly needs to scale down its in-house client development costs to a level commensurate with its direct return on investment _ in other words, to some dollar amount approaching zero.

Essentially, Mozilla is a loss leader in Netscape's strategic pursuit of business in the premium markets for intranet servers, development and site management tools, electronic commerce applications and systems integration services. These are extremely competitive markets in which Netscape would be hard pressed to distinguish itself from entrenched competitors such as Microsoft, IBM/Lotus, Novell, Oracle and Sun. One can foresee the day when Netscape, realizing it does not have the resources to duke it out with these powerhouses, seeks out a suitable merger partner.

What's hard to understand is how Netscape - either independently or as a division of a larger firm - could justify maintaining the Mozilla support infrastructure for a product that contributes nothing to the bottom line. Eventually, Mozilla will have to be spun off as a nonprofit advocacy organization that disseminates free, standards-based intranet client code for the explicit purpose of preventing Microsoft from taking over everything.

Microsoft likely will watch Netscape's actions with a mixture of concern and bemusement. Concern because Mozilla, rigorously based on open Internet standards, may weaken ISVs' commitment to Microsoft's proprietary ActiveX and COM+ technologies. Bemusement because Microsoft knows that its own intranet client products can hardly fail because they come strongly integrated - if not bundled - with its near-monopoly operating environments and desktop and server suites.

Barring regulatory intervention, Microsoft almost certainly will not divulge its own client source code to the general public. Instead, it will probably respond by beefing up the API set available for integrating third-party applications with Internet Explorer and Active Desktop. This would be the smart move because few application developers want to muck around in a browser's source code if they can invoke the same functionality with a concise set of high-level programming statements.

But if nothing else, Netscape's source code giveaway will create the market conditions necessary for sustaining a competing browser in a Microsoft-dominated world.