Content-Type: text/html; charset=UTF-8 Actra News Index







By Steven Vonder Haar - Inter@ctive Week.
Jim Sha thinks he's sitting on top of another Netscape Communications
Corp. While such an outlook is typical of many Web entrepreneurs, Sha can speak from experience. Having helped launch Netscape in 1994, Sha now fronts for Netscape's first high-profile joint venture company, Actra Corp.  
This week Actra -- the progeny of a partnership between Netscape and General Electric Information Services, or GEIS, in April 1996 -- steps out of the shadows for the first time to tell the world what it's been working on for the past year.   Carrying the full weight of Netscape's electronic commerce strategy on its back, Actra is arguably the year's most influential new player in the e-commerce space.   "We are born with a silver spoon," Sha says of the pedigree and marketing muscle that back his start-up.   The support comes not only from Netscape. GEIS ( is a leading supplier of traditional electronic commerce services and software.   "We'd like to be able to repeat the growth rate of Netscape," Sha says. "With the resources we have and the market ahead of us, it's very doable."   Such aspirations are no less grandiose than those of Netscape ( When it comes to Internet business, Actra wants to do everything.   With just a single product slated for release this month -- but with more commerce-related software in the pipeline for release later this year -- it's much too early to judge the viability of Actra's approach to the e-commerce marketplace.   Industry watchers generally praise the joint venture for bringing valuable new ideas to the e-commerce space, but they predict the company will face a bumpy ride in its efforts to claim a top spot in the market.   "Actra has a lot of potential in this marketplace if they choose the right strategy," says Ullas Naik, vice president at the First Albany Corp. investment bank in New York. "But the path they are choosing may limit their ability to grow over the long term."   Actra's strategy is to develop a framework that integrates the complex technologies used in e-commerce into a single package that can be sold to corporate users, either piece-by-piece or as a turnkey solution.   Everything from databases from Oracle Corp. and search engines from Verity Inc., to security software from RSA Data Security Inc. and payment systems from CyberCash Inc., is incorporated into Actra's offerings.   In short, Sha wants to sell business solutions, not technology.   "This is an applications business," he says. "We are focused on fixing people's problems."   Sha echoes Netscape's new mantra, which calls for more focus on providing customers with service that integrates technology, rather than just selling software. The conversion represents a new religion that Netscape Senior Technology Vice President Marc Andreessen began preaching within the past month.   For Actra, the idea is to integrate all aspects of a business exchange into the Internet commerce solution. That means not only the transactions but the customer service features needed to maintain relationships between buyers and sellers, such as online inventory tracking and order status updates.   "A pretty storefront is only one piece of the puzzle," Sha says. "The key thing needed to enable electronic commerce is not selling. It's delivering overall customer satisfaction."   Sha's pitch is likely to play well when he tries to sell corporate America on his vision of e-commerce.   "I haven't seen anybody take this broad an approach to the Internet commerce market," says Mike Kennedy, vice president of advanced information management strategies at the Meta Group Inc. consulting firm. "If I were a Fortune 500 company, I would be interested in hearing about a coordinated approach that could pull together all my commerce activity under a single umbrella."   Other industry watchers, however, remain guarded in their assessment of Actra.   "They've got great plans that look great on the overhead projector," says David Alschuler, senior analyst with the Aberdeen Group Inc., a consulting firm in Boston. "Now they have to execute."   Actra will roll out its capabilities throughout the year. This month, it will serve up systems that help bridge the communication gap between the Internet and traditional proprietary electronic data interchange, or EDI, systems. Later this year, the company will introduce integrated systems that streamline the ordering and selling process.   Some of the company's product development efforts, however, seem disjointed and virtually unrelated. For instance, Actra is working on a system designed to handle subscription management services for Web publishers.   While such a system may find demand in the marketplace, it detracts from Actra's focus on enabling business-to-business transactions. It's almost as if Actra handles the publishing product simply because parent Netscape had no better place to park the project, says Stan Dolberg, director of software strategies at Forrester Research Inc.   "If they didn't have some of this stuff from Netscape sticking out like a sore thumb, they'd be pretty crisp," Dolberg says.   "It's hard to see Actra's rationale for business-to-consumer products," he says. "Companies will not be successful with products in both the business-to-consumer and the business-to-business areas. The two sectors will diverge over time."   Sha counters that electronic commerce involves more than simply mastering technology. Also critical, he says, is a working knowledge of business issues and corporate practices in individual industries.   The company ( has hired experts in a variety of fields -- such as health care, automotive, aerospace manufacturing and retail -- to help in the development of industry-specific systems, Sha says.   While such an approach may appeal to corporate customers, Dolberg echoes the criticism of First Albany analyst Naik, saying Actra's strategy could limit its long-range growth potential.   In developing applications for specific industries, companies can find themselves trapped in a spiral of specialization. As markets shake out into increasingly distinct vertical niches, companies like Actra have to become more specialized in order to distinguish themselves in the eyes of customers.   However, such specialization is difficult to maintain in many industries, limiting the number of markets that an applications developer can address, Dolberg says.   Of the $3.2 billion in sales that Forrester projects for electronic commerce software sales in the year 2000, only 10 percent will go to applications developers like Actra, Dolberg says. The bulk will stay with the core companies, such as Netscape, that supply the technology that underlies electronic commerce systems.   "Applications companies will be driven into vertical niches and will be forced to get deeper into the business practices of specific industries to sidestep the companies that are supplying the basic technology platforms," Dolberg says.   As part of the joint venture agreement, both Netscape and GEIS will sell products on Actra's behalf, giving the start-up an instant global sales force of more than 600 marketers.  
But even with Netscape's shift toward a service orientation, it may have difficulty selling Actra's turnkey solutions, Dolberg says.   "Electronic commerce is complex and difficult to implement," he says. "Actra's deals are going to be like Netscape's worst nightmare because they are so service-intensive."   Sha views the complexity that Dolberg describes as a key factor validating Actra's approach, which aims to simplify the way companies implement commerce solutions. And given Actra's high-profile parents, it appears that Sha and his team will at least have the opportunity to prove whether they are right.   "We have high visibility, thanks to the companies that are backing us," Sha says. "We certainly are not short of interest or prospects."

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