Web Forces Change

In his book The Road Ahead , Bill Gates predicts that the Internet will transform businesses worldwide. His words were prophetic for Microsoft: Shortly after the book's publication, the company announced a series of initiatives to incorporate the Internet into its products, including the surprise announcement that it would lic ense Sun Microsystems' Java for incorporation into its products. This announcement marked a rare departure for the company, sanctioning a product that it did not buy or develop.

Other companies -- ranging from personal finance and groupware vendors to on-line services -- are also changing their business strategies to incorporate the Internet. One benefit to consumers will be cheaper software. Some resellers that sell expensive, specialized software li ke CAD won't sell low-price programs, so software vendors are selling direct over the Internet.

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The Web Made Them Do It

BEFORE

Lotus charged $155 for its Notes Desktop run-time client.

Intuit's Quicken provided electronic banking via private networks and
partner banks.

Cadkey (Windsor, CT) sold expensive CAD programs only through VARs.

Microsoft's code-named Blackbird content-authoring program supports
the Microsoft Network only.

CompuServe's on-line service was separate and distinct from the Web.


AFTER

Lotus lowered the price of the Notes Desktop client to $69.

Intuit will offer banking over the Internet and America Online: it
doesn't require Quicken.

Cadkey will supplement its VAR channel by selling less expensive CAD
software over the Internet.

A new version, called Internet Studio, will let you create content
for MSN and the Internet.

Users can choose from a range of Web browsers to access the Web
 via
CompuServe.


WHY

Lotus is feeling pressure from less expensive Web-based groupware.

Rather than make money off low-margin software only, Intuit also gets
a small fee per transaction.

VARs that profited by selling expensive CAD software wouldn't sell
less expensive products.

Developers believed Microsoft's strategy constricted them to MSN.

CompuServe makes its money charging connect fees for Internet access,
not on its browser. Users complained the previous policy was too
restricting.