October 30, 1996 6:00 AM PST

MS debuts e-commerce software

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Microsoft (MSFT) today announced that its electronic commerce software, Merchant Server 1.0, is shipping after a two-month beta-testing period.

Merchant Server was largely adapted from Internet storefront software created by eShop, which Microsoft acquired in June.

Today's unveiling of the Microsoft software for building and operating Internet storefronts came at its developers conference in San Jose, California. The event was replete with Microsoft collaborators for Net commerce, including banks and credit card processors, Web site builders, Internet service providers, and other third-party software companies.

"This announcement will make Internet commerce a reality by bringing down the cost to merchants and making a much more convenient and secure buying experience for consumers," said Jeff Thiel, director of business development in Microsoft's Electronic Commerce Division.

"Microsoft's open architecture makes this as flexible as your imagination," said Bob Gibson, a partner in Web site builder Intermaxx who used Merchant Server to build a Web storefront for Nova Star Computers of Peoria, Arizona. "Netscape and Open Market are essentially closed."

Scalability is another virtue, Gibson added: "It runs across multiple file servers for one store, and you can have the servers geographically dispersed."

Albert Lopez, CEO and president of US Web WorldPort, a Web site creation firm, likes Merchant's Server's price. "It has the best price and performance we found."

Microsoft's most important ally in its effort to create the infrastructure for Internet commerce may be VeriFone; its vPOS merchant software, built into Merchant Server, functions like a cash register to process electronic payments for a Web store.

Already dominating the market for countertop terminals that process credit card transactions for retailers, VeriFone represents a link not only to financial institutions--that Microsoft chairman Bill Gates has alienated in the past--but to merchants familiar with the VeriFone brand.

Among the financial institutions supporting Microsoft's announcement are American Express, Bank of America, Citibank Card Acceptance Europe, First Data, Royal Bank of Canada, and Wells Fargo Bank.

But many of those banks and payment processors also are working on electronic commerce deals with Microsoft rivals, such as Netscape Communications, Oracle, and IBM.

Microsoft touts Merchant Server, which is now part of its BackOffice suite, as both a cost-effective way to create compelling Web storefronts to draw potential buyers and able to target sales promotions to individual visitors.

Microsoft's publicists, declaring that 40 Web sites will be vending with Merchant Server within two months, have already declared it the "most popular software for selling over the Internet," a claim rivals are sure to dispute.

Among the high-visibility merchants building Web storefronts with Merchant Server are music chain Tower Records, flower vendor 1-800-Flowers, computer retailer CompUSA, direct mail reseller Micro Warehouse, and corporate software reseller Software Spectrum.

Among the dozen or so independent software vendors that will add functions onto Merchant Server are electronic payments firm CyberCash, business software maker SAP AG, and electronic data interchange software firm Sterling Commerce.

Microsoft also said Web hosting services including UUNet Technologies, Digex, Digital Equipment, and USWeb Worldport will host secure merchant sites built with Microsoft software.

Among the systems integrators supporting Merchant Server are Deloite & Touche and Hewlett-Packard.

In addition, Microsoft named two dozen site builders that will use Merchant Server to create Web storefronts.

Merchant Server is priced at $18,490 per server for sites hosting their own electronic storefronts. For Internet Service Providers and other hosting services, it costs $14,995 for a one time server license charge, plus a $3,495 license per hosted site. For the next six months, Microsoft is offering a discount of one-third off of the per-hosted-site license, bringing the cost down to $2,330.

 

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