Can Microsoft Buy Your Loyalty?
Rebate for using Passport service is latest effort to bolster participation before competition strengthens.Stuart J. Johnston, Special to PCWorld.com
Who do you trust with your most confidential information? Microsoft is hoping you will trust it, and is putting its money where its mouth is, at least through the holidays.
The company is offering a $20 rebate on every $100 you spend online using its Passport Express Purchase, an electronic wallet that works with Microsoft's Passport single sign-on authentication system. If you use its Express Purchase feature to electronically provide credit card numbers and shipping information to the Passport-participating e-tailer, you get the rebate. Here's the catch: your total rebate can't exceed $100.
But the point is to lure you into trying a one-click shopping experience. The pitch for Passport Express Purchase is that you choose the products you want to purchase and click to check out; the system handles the transaction. And you don't have to remember user names and passwords for all the Web sites that you visit, whether you're shopping or applying for a loan.
Longer term, however, Microsoft wants you to trust Passport with authentication for virtually any data that's key to your life. Wide acceptance of Passport is also key to the success of Microsoft's first sally into Web services, which are called ".Net MyServices" and are aimed, at least initially, squarely at consumers.
Microsoft isn't alone in wanting your trust. In September, fierce Microsoft competitor Sun MicroSystems co-founded The Liberty Alliance Project, a coalition of more than 30 major global companies assembled to "develop and deploy an open solution for network identity" that sounds much like Passport. The list of members reads like a who's who of the world business community, ranging from American and United Airlines to Bank of America and American Express, to investment powerhouses like Dun & Bradstreet and Fidelity Investments, to phone companies like Cingular Wireless and Global Crossing, to General Motors, Sony, and others. The newest member: America Online, which has its own single-log-on service for members and visitors. It is also said to be developing an expanded version.
Just the Start
But for now, Passport is the biggest game in town. And Microsoft is thinking even bigger. The company plans to offer a raft of consumer services that relies on having personal information--from user names and passwords to financial data, calendars, and even medical records--available online through a variety of devices. Microsoft wants its Passports used on smart phones, PDAs, PCs, and electronic kiosks.
Key to this is getting consumers to feel comfortable storing personal information online, and on Passport. Microsoft requires you to sign up for a Passport account in order to get a Hotmail account, or to use MSN Messenger or MSN Gaming Zone. That adds up to about 200 million Passports. But different sites require different levels of disclosure of personal information. The e-wallet, for streamlined e-shopping, requires credit card and shipping information, and only two million Passport holders have signed up for that.
The rebate offer is intended to drive customers to buy online through Microsoft's EShop mall, says Bob Visse, MSN director. While Visse admits a secondary goal is to get more people to use.Net Passport's electronic-wallet feature, so they're ready for the first.Net MyServices, scheduled to debut in 2002, the primary objective is to compete with shopping portals on Yahoo and AOL. Microsoft offered a similar rebate last year, Visse adds. Still, Microsoft acknowledges only 1 percent of Passport holders also have an e-wallet.
That's partly because most of us are leery of giving any single company access to all of our information, according to one leading analyst. "A lot of consumers don't even trust banks with some of this information," says Rob Enderle, research fellow at Giga Information Group.
Ultimately, it all boils down to Who do you really trust?
In Microsoft's view, of course, that should be Microsoft. The company has repeatedly promised consumers will "own" all the information stored in.Net MyServices, the company will never do anything that takes advantage of its caretaker role.
However, Microsoft does not have a sterling record in the area of security. Its servers have been hacked and infected with viruses, and the company issues dozens of security patches for its products each year. Also, polls show that consumers generally fear granting any single party power over all of that information.
Competition Rallies
To be fair, AOL already offers single sign-on authentication and e-wallet services to both AOL and non-AOL users. But to date, AOL hasn't described a vision of Web services as grand, or as grandiose, as Microsoft, although it is widely rumored to be working on a serious contender to Passport. Codenamed "Magic Carpet," the system is purportedly built on the company's free Screen Name Service. AOL won't officially comment on the project, although company representatives broadly hint that the rumors are true.
Enter the Liberty Alliance. Counter to Microsoft's role as sole provider of authentication services, the alliance invites many parties to provide that service, using a standardized authentication mechanism. These companies already have established "trust" relationships with existing customers.
"We think we [The Liberty Alliance] have an advantage because trust relationships are based on years [of relationship]," says Jeff Veis, Sun's senior director of business alliances. Under its plan, you could use a single sign-on authentication system from any alliance partner. You could get the account from your bank, your ISP, or the phone company, and use it with any alliance partner site. It's analogous to real world passports. They're issued by different nations, but all still work wherever you travel.
Microsoft wants you to use its authentication tool--.Net Passport--and at least some of its online services. The system is in place at sites like MSN's EShop, Money Central, Expedia, CarPoint used car sales, and other services. Microsoft plans to expand with.Net into new services. Microsoft officials also claim consumers and businesses don't have to use only Microsoft's authentication. Even one from a Liberty Alliance member would work if it complies with the Kerberos security technology, developed at the Massachusetts Institute of Technology, and being built into Microsoft's authentication system.
So far, however, neither side trusts the other.
Can We Just Get Along?
Will the Liberty Alliance ensure interoperability between its choice of authentication technology and Microsoft's.Net Passport? Veis demurrs. "There is a common need for a global network identity standard so that people can just leverage an open, standard, single sign-on," he says. "Our concern with Passport is that it's intimately linked to.NET."
The Liberty Alliance has repeatedly "invited" Microsoft to join the alliance, Veis says--which Adam Sohn, product manager on.Net core platform services, denies. "Sun said we were invited to join the day they launched [The Liberty Alliance] and--know what?--nobody called us," Sohn says.
Asked whether Microsoft would consider joining the Alliance, Sohn repeats the party line that the company is "taking a wait-and-see attitude." This is partly because of Microsoft's numerous recent tête-à-têtes with Sun, including a lawsuit over Java, and Sun's testimony and lobbying against Microsoft in antitrust proceedings.
"If [Liberty Alliance] is going to be some kind of foil to be anti-everything that Microsoft is doing, then it really isn't going to be very productive for us," Sohn adds.
Veis shrugs off Sohn's comment. "I think it's natural in the technology industry to have a co-opetition model. Hopefully, Microsoft is joining [the Alliance]."
An AOL representative also is optimistic: "If Microsoft does join the alliance, it might represent an important step away from their past efforts to leverage their monopoly and control this new space," says an AOL spokesperson.
However, Liberty Alliance needs to develop a technology specification before it's a contender. Microsoft's Passport is two years old with hundreds of millions of users. Veis points out that the Alliance could adopt technologies that already exist. "I'm very optimistic you'll see traction around the Liberty spec in 2002, possibly even in the first half," he says, adding that he also expects the Alliance to have more than a thousand member companies in the next year.
If that occurs, analyst Enderle's bet is that the Alliance will adopt AOL's Magic Carpet. "It looks like the odds-on favorite that, if there's anything to Magic Carpet, it'll form the core component," he says. "That's a big 'if' though because, of course, none of us have seen [Magic Carpet]."
We have, however, seen the beginning of the entry to more mature Web services. Whether it comes from Microsoft, The Liberty Alliance, or another source, universal authentication is on the horizon--perhaps sooner than we think.