The Problem With Microsoft

The great thing about Microsoft is that it can set standards. The problem with Microsoft, in my humble opinion, is that no one trusts them to set those standards anymore.

An example came up last week in the area of privacy. Some time ago Microsoft bought a company called Firefly Networks Inc. Firefly was behind something called the Platform for Privacy Preferences (P3P), a standard for exchanging personal data between clients (users) and servers (companies). With Microsoft behind it, analysts figured that effort might get some momentum.

It didn’t happen. So last week Microsoft re-packaged Passport as a proprietary solution called “Central ID.” MSN merchants will be encouraged to use the “Central ID” to personalize shopping for their users based on preferences and purchase histories.

There were good reasons why something like P3P would have been powerful for thousands of Web stores. Credit card data and privacy preferences could be stored in a standard format, passed along with one click, and shopping would be much simpler for both sides of every transaction.

Many merchants do offer the benefits claimed for “Central ID.” NetPerceptions Inc., of Eden Prairie, Minnesota, has sold its personalization servers to almost 100 big stores like CDnow, Bid.com and TicketMaster Online. Vice president marketing Steve Larsen told me that if “Central ID” works under the P3P standard Microsoft has proposed, it would work fine with his software.

He also put the best face on Microsoft’s failure. “Merchants felt that understanding their customer’s preferences was a key competitive advantage,” he explained. “If the customer’s preference information was stored by the customer and could be taken to a competitor, it would take away a key competitive advantage.”

Still, if Microsoft has lost its power to set standards, it’s bad news for everyone. Do you want to wait for committees before committing to new technology?

What do you think? Let’s talk about it.

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