Sun and AOL join forces on I-commerce for businesses

November 24, 1998 — The purchase of Netscape Communications by America Online (AOL) on Tuesday was augmented by a bold, 00 million, three-year licensing pact with Sun Microsystems that aims to allow all sorts of businesses to fully outsource their Internet-commerce operations.

The joint goal of Sun and AOL-Netscape is to accelerate the acceptance of enterprise-class Internet commerce via Sun’s technology, new classes of client devices, and an AOL and Netscape-branded enterprise portal strategy, the companies said.

The companies said they plan to work jointly to provide “complete turnkey solutions along with modular software flexibility and consulting services” to spur corporations to extend their business online quickly.

The triumvirate of AOL, Netscape, and Sun will produce services for outsourcing to businesses such mainstream functions as messaging, online catalogs, payments and receipts, and supplier and partner commerce. Services are even planned to extend into internal functions such as human resources and payroll.

The bold move smacks of the enterprise portal strategy first espoused by Netscape last June and recently adopted by Sun. Other companies, such as Oracle, IBM/Lotus, and Microsoft, have also set their sights on offering online services to corporations, large and small.

Through their joint efforts, AOL and Sun will deploy a suite of products and services that allow companies and Internet service providers to create large-scale I-commerce services for their customers.

Rent, don’t buy!

In an ironic twist, the new technologies of Java, the Web, and integrated client devices may harken back to the era of server-based, time-shared computing services, with companies renting services rather than buying and maintaining them in-house.

With its acquisition of Netscape and licensing deal with Sun, AOL is swiftly broadening its purview from a mostly consumer-oriented franchise, extending its network capacity to serve the business community as well. AOL acquired CompuServe for much the same purpose early last year.

“Increasingly, companies are seeing the power of the Internet as central to their business strategies and consumers are seeing the convenience of online commerce as central to their lives,” said Steve Case, chairman and CEO of AOL, in a statement.

“We are confident that working with Sun will make it much easier and faster for us to help companies set up shop online, as well as to rapidly build their e-commerce businesses,” he said. “We [also] share with Sun a vision for the future in which consumers will be able to access America Online brands anywhere, at any time, and from any device, and we believe that with this alliance we can make this happen more quickly.”

The relationship between AOL and Sun will be complex. Sun will become the primary supplier of systems to AOL — to the tune of 00 million in Sun goods and services through 2002 — and this will almost certainly be grounded, in large part, on the Sun SPARC architecture running Solaris-based platforms and servers, the companies said.

Sun said it will also embrace other operating systems. Indeed, Netscape has broad support for the Microsoft Windows NT platform for its suite of I-commerce software and services.

Sun and AOL have also committed to pick up and develop the next generation of Netscape’s popular Navigator and Communicator software clients — and you can bet that means an invigorated move for Java on the client.

For its part, AOL will receive more than 50 million in licensing, marketing, and advertising fees from Sun, as well as some revenue-sharing commitments from AOL’s business over the next three years, the companies said.

So, what does this mean for Java?

The agreement also bodes well for the extension of the Java technology as a network platform across myriad systems and enterprises.

“Today’s announcements with America Online further establish Sun as the partner of choice to meet the needs of both service providers and major organizations worldwide,” said Ed Zander, Sun’s chief operating officer, in a statement. “We are demonstrating the value of Sun’s Java and Jini technologies and how they will enhance new world commerce.”

As the steward of Java, Sun’s plans are ambitious, putting it on a collision course with IBM, Microsoft, Oracle, and Novell.

“As we rapidly move towards the networked age, major corporations are turning to Sun to provide the equivalent of ‘dial tone’ in their computing networks,” added Scott McNealy, president, CEO, and chairman of Sun, in a statement.

“Internet commerce requires continuous operation, infinite scalability, yet consumer-friendly ease-of-use. By combining the strengths of Sun with AOL and its brands, we can lead our customers into the electronic commerce marketplace of the future — into the networked age,” McNealy said.

Another benefit for Sun will be its new capability to sell AOL’s Netscape-branded suite of middleware software, with both companies using each other’s sales channels and customer relationships to deliver these products, the companies said.

Sun will also provide technical support for the former Netscape products that will remain branded Netscape but will be under AOL’s ownership.

Additionally, a major focus of the alliance will be to deploy Sun’s PersonalJava via AOL to a range of new Internet devices. PersonalJava, designed for such devices as personal digital assistants, cell phones, and pagers, will help further extend Java down to the consumer device level.