Dell will help small businesses set up a Web site on a Dell-owned server starting for as little as $17.95 a month. For companies that want to sell products on the Web, hosting packages start at $299 a month and go up to $1,448 a month.
As profits on PCs narrow and sales growth slows, Dell and others are looking to nab a piece of what analysts expect will be a $16 billion annual business by 2003. Dell's sales growth, which was higher than 50 percent for several quarters, has slowed in the past 12 months because of parts shortages, delays in purchasing by corporate customers, and falling prices for PCs.
"Dell doesn't get into anything where we don't think we can be successful," said Tim Mattox, vice president and general manager of the Dell hosting group. "We're being asked by a lot of customers to do this."
Computer chipmaker Intel opened its first data center last year. Exodus Communications hosts Web sites for hundreds of companies. Dell, the No. 1 provider of servers to small businesses, hopes to use its direct relationship with small-business customers to win accounts.
Dell will have servers running Linux and Microsoft's Windows 2000 and Windows NT operating system software. Customers can choose to run their site from a server shared with other companies or from a dedicated server.
Dell's focus on small business separates it from Intel and Exodus, host sites for larger customers. Only 26 percent of small businesses have Web sites, Mattox said, and only 15 percent of those businesses use the Web to sell products.
Copyright 2000, Bloomberg L.P. All Rights Reserved. The Sun-Netscape Alliance and Sybase are the newest entries in the Web portal software sweepstakes.
The two companies will soon ship new software that will let businesses create Web sites for their customers, partners and employees. The software will help companies build sites that let people access email, corporate resources and information, as well as commerce offerings.
The Sun-Netscape Alliance and Sybase join rivals IBM, Oracle, Microsoft and others in the crowded but lucrative Web portal software market. Analysts expect sales of e-commerce-related software to explode in the coming years as companies try to move their existing computing systems to the Web.
"It's basically a screen to access...everything you need," said Giga Information Group analyst Terilyn Palanca. "Who's going to buy this? Every corporation, because they want you, whether internally or externally, to be able to interface with them."
For example, a corporate Web portal can offer employees email, stock quotes, news and corporate resources, such as human resources information or updated sales data. The portal for partners and suppliers will allow companies to conduct business online, while the portal aimed at customers will profile Web surfers and target information based on their interests and buying habits.
Sun-Netscape Alliance and Sybase executives said their portal software can help businesses link to their existing software, such as human resources and financial applications, as well as to information located in databases. The software will also give people secure connections to the Web, they said.
Sybase executives said its portal product--called Sybase Enterprise Portal--will feature a built-in application server as well as software from other vendors, including Vignette, which makes software that helps businesses manage content, and Autonomy, whose software allows users to conduct Web searches. An application server is software that handles transactions between a Web browser and a back-end computing system.
The Sun-Netscape Alliance, a partnership between Sun Microsystems and America Online, said its portal software, called iPlanet Portal Server, offers similar partnerships and features.
The goal is to provide an all-in-one software product that gives businesses the services they need, so corporate developers don't have to waste time by buying all the software separately and trying to integrate them, said David Jacobson, a Sybase marketing director.
"It reduces system management and reduces the time it takes you to 'rev' your sites," he said.
Alliance executives said the company's portal product will work in conjunction with its existing e-commerce software: an application server; Web server software that delivers Web pages to people browsing the Net; and directory software, technology that serves as a central information database for users, systems and software.
The Alliance plans to ship iPlanet Portal Server in the second quarter. Sybase will ship Sybase Enterprise Portal in April. The companies have not announced pricing.
The new generation of small, stylish computers might be appealing to users, but as Hewlett-Packard introduces new business systems today, it plans to pitch another theme too: Small computers cost less.
The e-Vectra, due to be unveiled today and to begin shipping in April, is HP's entry into the stylish computer market. Weighing just over eight pounds, the system features a blue-white color scheme and comes with various features to make operating the machine relatively easy, such as a large start button and USB (universal serial bus) ports.
Formerly code-named the ePc, the e-Vectra will compete directly against Compaq's iPaq and the Stardust system from IBM.
Like its competitors, HP will emphasize the cost advantages of the new generation of computers. A smaller chassis leads to a lower overall hardware budget and cuts shipping costs as well as necessary desk space, said Michael Cade, product manger in the U.S. PC marketing center for HP.
A basic e-Vectra with a Celeron processor will start at $549. More high-end models, using the same chassis, will come with Windows 2000 and 733-MHz Pentium III processors.
HP has also built in a number of features to cut down on support costs. The e-Vectra uses an external, notebook-like power supply, for instance. Most desktops put the power supply inside the computer. This creates problems, however, because a power supply breakdown requires that a technician open the case. With the e-Vectra, owners just have to look at the power cord.
"If the green light is on, the power supply works. If it is out, you replace it," Cade said. "It makes diagnostics much easier."
The new computer also comes with features to stop office tomfoolery. Employees, for example, can't open the case. This will cut down on memory theft, which IT managers say remains a problem.
The hard drive is the only part that can be removed easily. "The hard drive breaks down more than any other part," Cade said. To foil would-be thieves, however, the door to the drive can be locked.
In addition, the USB ports on the e-Vectra are located in the back of the system and can be blocked with a muzzle-like device. Both of these design features exist, among other reasons, to make it more difficult for workers to plug in digital cameras, MP3 players and other entertainment devices, he said.
All these points, which Compaq and IBM also will emphasize, will be some of the more important factors in selling the new desktops. Apple may have kicked off the stylish computer wave with the iMac, but the computer was sold in consumer markets to people who don't manage large IT budgets.
Interestingly, the emphasis on low cost may eventually have a rebound effect on manufacturers, analysts have speculated. If corporate buyers concentrate too heavily on costs, PC makers could see the same sort of price spiral that decimated profits in the consumer market.
Downward pressure will be tempered somewhat by the release of Windows 2000, which appears to require fairly fast processors and lots of memory. Versions of the e-Vectra containing Windows 2000 will come with a 600-MHz Pentium III and 128MB of memory at a minimum, Cade said. Still, with cost at the forefront of marketing pitches, pricing will likely continue to inch downward.
"In 1999 there was a bloody battle in consumer (markets)," Roger Kay, an analyst at International Data Corp., said late last year. "The same could happen in commercial (markets)."
WASHINGTON--Microsoft and the government today face off for the last time as the landmark antitrust case goes before the judge for a final ruling.
Legal experts expect little from final oral arguments that will affect the case's outcome. The larger drama may be ongoing settlement talks, which are simultaneously on the verge of breakdown and breakthrough.
After 76 days of testimony, U.S. District Judge Thomas Penfield Jackson's "findings of fact," conclusions of law submitted by both sides and a flurry of supporting legal briefs, the case comes down to today's hearing. After that, Jackson will draft his ruling, which could come at any time.
"It will be very unusual for something dramatic to come up during oral arguments that is going to change the direction of this case," said Rich Gray, an intellectual property attorney with Outside General Counsel Silicon Valley of Menlo Park, Calif.
Judges typically instruct lawyers not to repeat in oral arguments what they've written in their legal briefs, so some new ground could be covered.
Microsoft, for example, is expected to expand on its contention that the government is using the case to write new law and presented weak legal precedents in its conclusions of law. The Redmond, Wash.-based software maker may also argue that procedural changes during the trial favored the government, which is represented by the U.S. Justice Department and 19 states.
"In this case, the role of the oral arguments was as much a matter of setting a deadline by which the matter would be under submission to the judge," Gray said.
That deadline looms before both sides as settlement talks slog along, and it increases the pressure to reach an agreement quickly, said legal experts.
The negotiations picked up in intensity last week, but by the weekend the two sides had failed to reach a consensus, said sources familiar with the negotiations. One sticking point is agreement over how or whether to break up Microsoft into several smaller companies.
"I suspect Microsoft would be willing to go for some nonstructural remedies," said Stan Leibowitz, professor of economics at the University of Texas at Dallas business school. "But I keep hearing that some parts of the government camp, particularly the states, are crazed and won't settle for anything short of breakup."
Microsoft chairman Bill Gates last week reportedly said he would be willing to open the Windows source code "if that's all it took" to settle the case.
While many parties are calling for a physical breakup of Microsoft, something else may be needed to restore competition, and freeing the source code could be it, said legal experts.
"This is a 21st-century breakup, so you have to deal with the intellectual property question," Gray said. "To me, the only way to deal with a monopoly based on intellectual property is to replicate those intellectual property rights to competing companies."
Opening the Windows source code could mollify some of the states, which have been holding out for a solution that restores competition. But Microsoft would have to offer much more, Gray said.
Once the parties exit court today, the pressure to settle increases significantly, particularly for Microsoft, said legal experts. Should Jackson rule, as expected, in favor of the government, his findings of fact could be used in any of the 108 class-action suits pending against Microsoft.
The negotiations, which have taken on a charged emotional tone, appear polarized, with Microsoft offering too little to satisfy the government and trustbusters demanding too much for the software maker, said a source familiar with the discussions.
If negotiations break down, Microsoft will be forced to act on an appeals strategy, an approach some legal experts favor anyway. The U.S. Court of Appeals for the District of Columbia Circuit, which lambasted Jackson in an earlier Microsoft case, would likely handle the first phase of the appeal, and then the case potentially could go to the U.S. Supreme Court within 24 months.
Following final arguments, Jackson could release his ruling at any time, even the same day if he is so inclined, although that would be highly unlikely.
"I wouldn't even be surprised to see a decision within two weeks," Gray said.
"Jackson has really moved quickly on everything, even though it seems like it's taking a long time," Leibowitz said. "He really streamlines everything. The case and the findings of fact came quite quickly. I expect he will continue to move quickly."
Jackson will have worked out at least the broad strokes of his ruling already and today will likely reference a "bench memo" throughout the proceeding, said legal experts. The document, which is usually drafted by a judge's law clerk, often analyzes the two sides' briefs, suggests follow-on arguments and lays out probable lines of reasoning a ruling.
As the case winds down, supporters on both sides are expected to rally support around possible remedies--or what to do about Microsoft's alleged antitrust violations. Soon after issuing his ruling, Jackson will schedule remedy hearings, where the government is expected to ask for the breakup of Microsoft, said legal experts. In December, the Justice Department retained an investment firm for proposing different scenarios, particularly breakup.
Supporters on both sides are likely to make their own proposals public first, taking advantage of the media frenzy surrounding the case, said legal experts.
The Progress & Freedom Foundation, for example, on Friday will hold a conference in Washington, D.C., to discuss its remedy for dealing with Microsoft: creating three separate Windows competitors, but leaving the rest of Microsoft's products with one company.
Other proposals are expected over the coming weeks, both before and after Jackson's ruling.
Net2Phone has captured a big chunk of the consumer market with its Internet-based phone service. Now it wants to tackle the needs of small business.
Net2Phone, whose software and network allow people to make cheap long-distance calls over the Net, will soon sell a device that will allow
| Net2Phone at a glance |
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HQ: Hackensack, NJ URL: www.net2phone.com CEO: Howie Balter Chairman: Cliff Sobel Employees: 333 Annual sales: $33.3 Million Annual income: ($24.7) Million Market cap: $2.7 Billion Date of IPO: July 1999 Ticker: NTOP Exchange: Nasdaq
More:
Bloomberg (2/18/2000)
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The upstart Internet telephony firm is negotiating with U.S. retailers and computer stores and hopes to have the product in store shelves within six months, said a company spokeswoman. Net2Phone already sells the device, currently called IP Max, internationally.
The device will allow small businesses with as many as six employees to make Internet-based phone calls with their regular phones. They simply plug the device into their traditional circuit-based phone system, often called a PBX. Businesses can choose to make free calls over the public Internet or pay a fee to use Net2Phone's private Internet-based network, which can offer better voice quality, the spokeswoman said.
"If you want to connect to our network, it obviously costs more, but if you have an existing (private line) or similar fast Internet connection, that should be good enough," Sarah Hofstetter said.
With its latest move, Net2Phone will compete against networking firms 3Com, Cisco Systems, Nortel Networks, Lucent Technologies and others in the low end of the small business market.
The networking firms are all selling Internet-based PBXs to small and mid-sized businesses as a cheaper and easier alternative to traditional technology.
The difference between the products is that Net2Phone's device allows businesses to continue to use its PBX phone system, while the other networking firms' products serve as replacements, Hofstetter said.
The companies are all going after an emerging Internet telephony market, where Net-based phone calls are often cheaper than traditional long-distance phone calls. For example, a Net2Phone user in the United States can call London for 8 cents a minute.
The small business market is a new strategy for Net2Phone, which has focused primarily on the consumer market through a series of high-profile alliances with Web sites such as Yahoo and Netscape, PC makers like Compaq Computer, and long-distance carriers like Sprint.
Traditionally, Net2Phone subscribers had two ways to make Net-based phone calls: They dialed a number using the company's software on a PC and spoke through a PC microphone; or they dialed a regular phone using a calling card. All the calls are routed through Net2Phone's private Internet-based network.
The company, which competes with Deltathree.com, Dialpad.com and others in the Net telephony market, has traditionally tried to get its software in front of as many consumers as possible. Last summer, for example, Net2Phone inked a deal with America Online, which is integrating Net2Phone's technology into its popular instant messaging software, called ICQ and Instant Messenger.
But lately, the company has been trying to get its software installed in more hardware devices. The company recently announced two deals that would allow consumers to make long-distance calls directly through Panasonic phones and 3Com modems.
Analyst John Cha, of market research firm Frost & Sullivan, said Net2Phone's foray into the small business market with the six-phone device is a smart move.
"It brings the brand name to everyone, and that's important," Cha said. "It's another way to leverage their network and add more minutes--and that's what counts in this industry."
Net2Phone's Hofstetter said the company will soon sell a headset for consumers who use their PCs to make Net phone calls.
She declined to comment on rumors that America Online is interested in purchasing a bigger stake in the upstart Net telephony firm. AOL, which recently purchased Time Warner, currently owns about a five percent stake in Net2Phone.
Cha said it would make sense for AOL to be interested in Net2Phone.
"AOL's business strategy is to become a one-stop shop of communications," he said. "And telephony services fits very well in their goal of becoming a leader in the communications market."
Three newly public companies will be welcomed on Wall Street this week, including a firm in the hot cellular sector whose debut has been highly anticipated.
Nextel Partners, a unit of Nextel Communications, is looking to raise up to $423 million based on the high end of its $16 to $18 pricing range and 23.5 million shares offered. The size of the offering is more than twice the average size for new issues this year.
Along with Nextel Partners, broadband firm Carrier1 International and chipset maker Intersil will make public offerings this week. Although the number is less than in previous weeks, the IPOs are expected to garner much investor interest, analysts said.
"It's going to be a light calendar week with only seven offerings. But of the seven, three are going to be blockbuster deals," said Jeff Hirschkorn, senior analyst with IPO.com.
Nextel Partners will offer shares tomorrow in the wake of two recent successful public offerings by similar wireless technology firms: Alamosa and TeleCorp.
"Alamosa had a 66 percent gain on its first day of trading, and TeleCorp gained 65 percent," Hirschkorn said.
The company also has notable investors. Cellular pioneer Craig McCaw, via his Eagle River Investments, will hold an 8.2 percent stake in Nextel Partners after the IPO. The company, based on the high end of its expected share price range, will have an initial market cap of $4.3 billion.
Hirschkorn noted, however, that Nextel Partners' top rank will soon be displaced when AT&T launches a wireless tracking stock for its business this year. The tracking stock is expected to raise upward of $10 billion, according to some Wall Street analysts.
The company is expected to price today and begin trading tomorrow under the ticker "NXTP." Goldman Sachs and Donaldson Lufkin & Jenrette are co-lead underwriters on the deal.
Other IPOs on tap this week include Carrier1, a European firm that provides voice and data services to telecommunications companies. The firm is expected to raise up to $318.8 million based on the high end of its pricing range of $15 to $17 per share. Carrier1 plans to offer 18.8 million American Depositary Shares (ADS). Such shares are traded on U.S. exchanges for firms based abroad.
The company expects to price Thursday and trade Friday under the ticker "CONE." Morgan Stanley is the lead underwriter.
Carrier1 posted a $52 million loss on revenues of $59.8 million during the nine-month period ended Sept. 30.
Chipmaker Intersil is expected to sell 20 million shares at $18 to $20 per share and could raise as much as $400 million. The company expects to price late this week and trade under the ticker "ISIL." Credit Suisse First Boston and Salomon Smith Barney are the lead underwriters.
Some of Intersil's largest customers are networking firm 3Com, Compaq Computer and Finland's wireless giant Nokia. The company posted a $16.4 million loss on $292 million in revenue during the six-month period ended Dec. 31.
Excite@Home and Dow Jones will create a new Internet company targeting businesses and plan to take it public this year, CNET News.com has learned.
The company will develop a Web portal designed for small and medium-sized businesses and is expected to file to sell a minority stake in an initial public stock offering, according to sources familiar with the plans. The site, also expected to debut this year, will keep the name of the business portal launched by Excite@Home last fall, Work.com.
Excite@Home, a high-speed Net access and content company, and financial information firm Dow Jones, publisher of The Wall Street Journal, will each own 50 percent of Work.com, sources say. They will also have an equal number of members on the board of directors, according to sources.
The partnership is the latest in a series of spin-off plans for Excite@Home. The company plans to issue a tracking stock for its content and portal properties in August.
Moreover, the venture reflects the continued boom in business-to-business services. Many analysts and executives believe that the small and mid-sized business market represents a huge untapped opportunity for Net-related companies.
Dow Jones and Excite@Home have individually tried to target the business market with Web portals just as interest in the small- and mid-sized business space has reached a crescendo.
Dowjones.com, a small business portal, launched last summer, and Excite@Home announced its business site in September. Scores of so-called application service providers (ASPs) and networking companies are also scrambling to make headway with small businesses.
Even the major business software makers have tried their hand at the business portal idea. SAP, a software provider for large corporations, operates the MySAP.com portal, and Oracle has similar aspirations.
The spin-off strategy is not new for Excite@Home. After months of internal bickering amongst its major cable partners, Excite@Home announced that it would create a tracking stock for its media and content assets.
The move came just as tracking stocks appeared to become in vogue. For example, AT&T decided to spin off its wireless assets as a tracking stock, and Disney's Go.com became a tracking stock late last year. Speculation has swirled for months that Microsoft might consider a similar strategy for some of its assets.
News.com's Ben Heskett contributed to this report.
H&R Block said its tax-preparation Web site was up and running after a week-long shutdown to fix a glitch that allowed private tax information to be shared.
As first reported by CNET News.com, H&R Block took its site down last Monday after tax information from Internet users appeared in other people's files.
The company's Web-based tax preparation service, which is the premier sponsor of Yahoo's Tax Center, experienced a technical glitch last week that accidentally switched some tax filers' records. As a result, when some registered users signed on to the service to work on tax returns, they instead received someone else's filing--including a social security number, home address, annual income and other highly sensitive information.
Fewer than 10 customers were affected by the problem, said Gene Goldenberg, senior vice president for software and electronic commerce. He confirmed that H&R Block notified all of the affected customers.
The tax program is one segment of the company's Web site, which also includes online trading and mortgage services. The site was also down Feb. 1 to Feb. 3 because of a surge of Web traffic.
The problems come as more people file their returns electronically and file them earlier in the year. The Internal Revenue Service said 10.29 million taxpayers filed their returns online by Feb. 12 last year, up from 8.74 million in 1998.
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