MS Exchange 5.0 off to the races

Microsoft (MSFT) will use the Internet World Trade show next week as a backdrop for the long-awaited rollout of its Exchange 5.0 groupware server, according to sources.

While Microsoft officials declined to make it official, industry sources say the code for Exchange 5.0 has been released to manufacturers and the much-awaited product will officially debut at Internet World next Tuesday in Los Angeles.

"We are absolutely on track," to ship this quarter, said Microsoft product manager Greg Lobdell.

The company last December scrapped plans to ship a version 4.5 release of Exchange, opting to instead spend several months adding increased Internet protocol support and client-side integration.

Microsoft has revamped Exchange's Web Connector, the product's Internet gateway, and tightened integration with the company's Outlook client software, which is included with Microsoft's Office 97 application suite. Other additions to version 5.0 include support for the messaging protocols SMTP and POP3, as well as the LDAP directory protocol.

In another indication of its Internet commitment, Microsoft has also added the ability to store HTML documents in their native form, eliminated the need for data conversion, and cut down on the potential for lost data.

Analysts had mixed feelings about the upgrade.

Bob Lewin, an analyst with DataQuest, said the new protocol support amounts to a game of "catch up" with the competition. He was more impressed by the addition of support for Outlook.

"Clearly, Microsoft is placing the Outlook client as the strategic client and will try and move people to it," said Lewin. Exchange will also work with standard browsers. But by emphasizing the Outlook connection, Microsoft will gain an advantage with customers by offering a simple client-side story.

Arch-rival Lotus Development has been criticized by analysts and has confused customers by releasing four groupware clients that work with its Domino Web server.

Tom Austin of the Gartner Group gave the upgrade high marks, but said the product will continue to suffer from poor scalability until a version 6.0 upgrade ships late next year.

"This is a keep-the-faithful-happy release," said Austin. He said Exchange can't support more than 16 gigabytes of data because of limitations to the architecture of the public folders and mail features.

That is an assertion that Microsoft's Lobdell said is overblown. "I don't think scalability issues are nearly as great as they are being made out to be," he said.

While Outlook vastly improves on the old Exchange client, Austin pointed out Outlook users will not be able to share the client software's applications or electronic forms with people who don't use Outlook and it won't work at all for those without 32-bit Windows 95 and Windows NT operating systems.

Despite the drawbacks, Austin said Exchange 5.0 will help Microsoft continue to expand its current customer base and position the company for the intensified competition to come.