Microsoft Product Unveiling Raises Vendor Fears

By Clark, Drew | American Banker, April 30, 1998 | Go to article overview
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Microsoft Product Unveiling Raises Vendor Fears

Clark, Drew, American Banker

Now that Microsoft Corp. has quieted a good deal of discontent among financial institutions, it has a lot of restless software vendors' feelings to worry about.

At a recent Microsoft-sponsored conference on Internet-based banking and brokerage initiatives, software people and technology consultants posed the hardest questions and voiced the loudest misgivings about where Microsoft is heading.

One technology company representative, noting that the components of the Microsoft Investor service could now be customized for financial institutions' Web sites, asked: "Given that you are offering content and hosting to banks and brokerages, why should they be thrilled about what we have to offer?"

In other words, Microsoft could be emerging as a competitor of companies it considers partners. Sound familiar?

Currently battling the Department of Justice over whether it is illegally tying its Internet browser to the Windows operating system, Microsoft has been accused before of using monopoly-like strength in one area to catapult into another.

Microsoft has apparently made considerable progress in convincing bankers that it is not trying to muscle them out of their core business. But the financial services projects Microsoft highlighted before an audience of more than 300-split evenly between financial industry practitioners and technology company representatives-went well beyond its major revenue generators-Windows 95 and Office desktop software and Windows NT and Back-Office server software.

Announced or previewed were version 2.0 of the Microsoft Internet Financial Server Tool Kit, familiarly known by its former code-name Marble; the Investor Platform Tool Kit; a real estate Web site named Home Advisor; and a consumer-oriented gateway to the Web called Start.

Also on display were the MSFDC bill payment and presentment system, which is a joint effort with First Data Corp., and the combination of the financial management software Money with its companion Web site, Insider.

Officials of the Redmond, Wash., software giant contend as always that they are not in the business of developing financial software per se.

"We have no intention of getting into these deep vertical areas," said Pete Higgins, group vice president of Microsoft's consumer-oriented interactive media group and a member of the executive committee that reports to chief executive officer Bill Gates.

The company's aim is to create a foundation on which more specialized developers can build applications.

Lewis Levin, general manager of the Microsoft desktop financial division, who reports to Mr. Higgins, put it another way when he said Microsoft believes in "high volume and low cost. When you count the lines of code in Back Office, you'll find it's a screaming deal."

"Microsoft is excellent at doing pilot projects that show people what you can do in an area," said Robert K. Fenstermaker, vice president of business development for Step Technology Inc., a software engineering firm in Portland, Ore.

"It raises the bar, opens up the technology door, and stimulates a whole new segment of the economy and the market," he said. Yet he still worries about how the Investor Platform Tool Kit could affect his financial institution system-integration business.

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