America Online had just wrapped up its acquisition of the business-oriented Netscape, which is a good thing. AOL's existing services for business users have been weak at best.
Last year the company launched its AOL Enterprise, the service providers second attempt at a business service that would allow customers to set up their corporate intranet using AOL's user friendly interface. But the service never took off.
Now with Netscape under its belt and its joint development deal with Sun coming together, AOL may have a chance at winning over business users with its electronic commerce efforts. But only through well thought out planning, says Steve Murray, an analyst at International Data Corp., a Framingham, Mass. consulting firm.
Netscape has substantial market share in the business to business e-commerce software applications arena with over $41 million in revenues representing 10% of the market share, according to IDC. Software vendors Broadvision, Ariba Technologies, Oracle and Open Market are runners in market share in that order.
Netscape's ECXpert for Internet Commerce Exchange and TradingXpert offer business users tools to set up supply chain integration, business to business procurement services and to create business trading communities on the Internet. Melding Netscape's business-to-business software into a service offering is a logical move for AOL, but it's unclear as to how the company will set up new e-commerce services, Murray says.
It makes sense that hosted e-commerce services would come out of the Netscape side of the house, with the possibility that Sun folks will actually support the servers or run the data centers that would host the Netscape software, analyst Murray explains.
AOL is not synonymous with business services, therefore, it is likely that any business-oriented service will carry the Netscape brand name. AOL has point-of-presence sites around the country that support its 14 million dial-up users meaning it would need to either build or acquire multiple data centers to support any type of application hosting services. AOL may also strike server collocation deals with one of its existing ISPs that carry a large portion of AOL's dial-up traffic such as MCI WorldCom's UUNET or GTE Internetworking, but its direction is still unclear.
While AOL has said that it plans on exploiting its recently acquired e-commerce assets, it hasn't said much more than that.
Between now and the second quarter AOL is expected to clearly define its strategy in developing new services and products. Additional announcements are expected as early as next week according to a Netscape spokeswoman.
