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February 7, 2000

Firmbuy Offers Hosted Procurement Site
Startup is first ASP to use Sun-Netscape E-commerce applications

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Online Procurement Meets E-Business Purchasing

New Options Fuel Growth In Online Procurement

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irmbuy Inc. is the latest company to launch a hosted Web-procurement service for midsize companies in North America. The Firmbuy service, unveiled last week, uses the buy-side and sell-side applications from iPlanet E-Commerce Solutions, the applications unit of the Sun-Netscape Alliance launched last year.

Like similar services from companies such as Works.com Inc. and Datastream Corp., Firmbuy aims to capture a chunk of the growing market for Web purchasing by smaller companies that can't afford expensive software deployments. The browser-accessible Firmbuy service is free to buyers; the company charges suppliers a varying commission on sales. Firmbuy offers nonproduction goods such as office, IT, and janitorial products from about 7,000 suppliers.

"In the offline world, most buyer companies already have to deal with resellers," says Firmbuy founder and CEO Sanje Ratnavale. "We act as that reseller online, offering competitive prices and hosting the software to marshal their demand."

Firmbuy is the first application service provider to host procurement applications from iPlanet, which are used by a handful of large companies. The apps were initially developed by Netscape's Actra joint venture with GE Information Services. GEIS sold its interest back to Netscape before Netscape's 1998 acquisition by America Online and alliance with Sun.

"Turning these procurement applications into an ASP model is very easy to do," says Torrey Byles, president of consulting firm Granada Research. "They are already behind a firewall and the users can get the same functionality and level of control--and almost the same performance--as they would by hosting it themselves."

Another hosted procurement service provider, Works.com, will launch a cooperative buying program this week that lets buyers join in discounted volume purchase agreements for a one-time fee of $50. Works.com will also debut enhancements to its service such as custom purchase requests, improved integration with accounting apps, and the availability of 10,000 additional IT products.

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