Intelligent Enterprise

Storming the Enterprise

Microsoft's midmarket .net maneuvers

Microsoft may be touting its "HailStorm" technology mainly as a boon for Internet consumers, but don't be surprised when the software giant tries to stake a claim with it in the business market as well.

HailStorm is a set of applications - still under development - that would ultimately give Internet users control over which people, businesses, and technologies have access to their personal information. It was unveiled in March as part of Microsoft's .NET initiative, an effort to turn its software into Web-based services that can be accessed on different devices. Microsoft plans to charge a monthly fee for HailStorm when it is released in late 2002.

Microsoft also intends to sell HailStorm to companies offering consumer and B2B services on the Web. In order for consumers to get the most use out of it, the technology has to be in place at the companies they patronize. So far American Express Co., Click Commerce Inc., eBay Inc., Expedia Inc., and Groove Networks Inc. have prototypes of the service with conceptual demos.

Ruthann Lorentzen, general manager of marketing and business development for .NET services at Microsoft, said the company will be pitching the idea to businesses such as FedEx Corp. and Ticketmaster. Companies would pay a flat fee ranging from $5,000 to $10,000. For higher service levels, Microsoft is still determining how much to charge.

As part of .NET, HailStorm could get more small and midsize businesses into the electronic trading game, according to AMR Research analysts Bob Parker and Randy Weston. To date, most of these businesses have resisted the use of exchanges and marketplaces for e-commerce transactions. However, because Microsoft already owns the desktop software market and has its Outlook email program installed on nearly every corporate user's computer, the company could market HailStorm as an inexpensive way to develop an Internet exchange.

Microsoft also plans to market HailStorm as an internal collaboration tool for both large and small businesses, Lorentzen said. For small businesses, the service would be sold as a component of Microsoft's bCentral Web site.

Industry analysts think HailStorm would be more attractive to small businesses.

"Personal information is as appropriate for a small business as for an individual," said Rob Enderle, research fellow at Giga Information Group. "Large corporations can keep data secure themselves and generally prefer to do it themselves."

Charles King, senior analyst at Zona Research, said the attractiveness to businesses is still unclear, since Microsoft's plans are not fully developed. However, there would be benefits for individual office workers using HailStorm.

"The explicit risk of the .NET initiative is that most people and businesses are used to having that box of CDs on the shelf that they paid for," King said. "The notion of switching over to applications and security via the Internet is a big jump."

Amber Howle

Amber Howle (amberstar@earthlink.net) is a freelance technology and business writer.