April 10, 1998 1:55 PM PDT

Microsoft buys IE users with NT

Microsoft (MSFT) wants more Internet Explorer users, and it's using Windows NT to get them.

The software behemoth is offering Internet service providers Windows NT 4.0 and related server software if they can convert their subscribers into IE users. The promotion comes as browser rival Netscape Communications (NSCP) has swung the spotlight back on itself with its release of the source code of its Communicator suite, which the company hopes will engender a new wave of Netscape-compatible browsers and other applications.

The Microsoft promotion encourages Internet service providers to use the Internet Explorer Administration Kit to customize Internet Explorer 4.0 and distribute it to their subscribers. The kit allows ISPs to tweak IE 4.0's interface, bookmarks, and default settings to suit their subscribers' needs.

To qualify for free Windows NT software, however, an ISP must customize IE 4.0 according to Microsoft's specifications--which allow Microsoft to keep track of the number of new IE users. The alterations do not let Microsoft gather any personal information about IE users, according to Microsoft group product manager Bill Koszewski. However, ISPs may choose to steer their users to a one-time "Welcome" page that asks the user why he or she is installing IE 4.0.

To win up to two free copies of Windows NT 4.0 Server, Proxy Server 2.0, and the NT Option Pack, an ISP has to persuade as few as 500 subscribers to use its newly customized browser by the end of June. Given those conditions, the promotion is targeted more toward smaller ISPs that might not be on the Microsoft bandwagon, both to expose them to Windows NT and to boost browser market share.

"Our goal is to reach out and do things that will help their business and make them friends of Microsoft," said Koszewski. He defined smaller ISPs as having "a few thousand subscribers" at most.

"We'd be very interested in getting a free copy of NT Server," said Wes Parker, network administrator for Vermont-based Waitsfield Telecom, which runs the Green Mountain Access ISP.

Waitsfield Telecom currently sends its subscribers a CD-ROM with both Internet Explorer and Navigator "so they can choose and we can stay out of the browser wars," Parker said.

Koszewski, in response to whether such a giveaway could violate "dumping" laws, downplayed the economic significance of the promotion: "This is pretty limited. One or two NT servers isn't enough to run an ISP on."

The list price of NT 4.0 Server, Proxy Server 2.0, and the Option Pack together is about $1,800. Koszewski likened the giveaway to promotions in other businesses: "It's like taping a package of snack chips to a bottle of Coke."

One employee at a large national ISP didn't think the promotion would have much impact on his business decisions.

"This is directed more at smaller ISPs than the big guys," said Ed Douglas, director of product management for ISP Mindspring. "For us to get 500 people to use IE per day is a no-brainer."

Netscape recently added similar customization capabilities to its Communicator software with its Client Customization Kit, but the company doesn't give away its server software as an incentive. When told of the promotion, a Netscape representative questioned Microsoft's tactics.

"We don't have an operating system we can give away for free to our customers," said spokeswoman Chris Holten. "This promotion begs the question whether Microsoft is abusing their monopoly power."

Microsoft controls roughly 90 percent of the world's PC desktops with versions of Windows 3.1 and 95, but the company isn't close to a majority share of higher-end workstations and server systems, where Windows NT competes against various flavors of Unix.

Microsoft representatives strenuously deny that the company's 90 percent hold on the desktop market legally constitutes a monopoly. If the Justice Department expands its investigation of Microsoft, that issue alone could well become the subject of a protracted court battle.

So far, ISPs registered for the promotion number "in the hundreds," but Microsoft doesn't expect to start tallying users until next month, Koszewski said.

 

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