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March 27, 2000

Medical Exchange Picks And Chooses Between Vendors
Neoforma.com uses Ariba and SAP products to better address needs of health-care community

By Alorie Gilbert

Related links:

ASP To Offer E-Commerce And ERP Apps From SAP (2/28/00)

Marketplace Maneuvers (1/24/00)

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oftware vendors have been duking it out to be the top supplier for business-to-business trading exchanges, but users and analysts say a single vendor sometimes can't offer a package that meets all of an online marketplace's needs. Medical marketplace Neoforma.com Inc. said last week that it will use the best of what competitors Ariba Inc. and SAP have to offer to enhance its E-commerce site, which links physicians and hospitals with medical-equipment suppliers.

Neoforma.com, which inked a deal with SAP in December, will use mySAP.com marketplace software for back-end functions, such as order management, and a pricing engine that stores prenegotiated contracts and applies them to specific transactions. The company is testing the system with six hospitals and plans to fully deploy it by July.

Neoforma will use Ariba on the front end, where suppliers and buyers place and respond to requisition requests, and will choose products from Ariba Network, Ariba's online marketplace for general business supplies, to sell on its site. "Everyone claims they have the whole solution, but that's never true when it comes to industry-specific needs," says B.D. Goel, Neoforma.com's VP of products and services. "What they provide is a generic framework for bringing buyers and sellers together."

Goel says neither SAP nor Ariba addresses the particular needs of the health-care industry, so Neoforma.com is customizing the Ariba software to create six user-specific interfaces. A small office of physicians, for instance, will get a different view of the marketplace than a big hospital. Neoforma.com is using several application-integration tools, including software from CrossWorlds, Tibco, and Software Technologies (see story, "Tools For The Business-To-Business Market To Debut").

While SAP offers its own E-procurement application and Ariba acquired back-end E-commerce tools from TradEx Technologies Inc., Neoforma is interested only in each company's established and proven capabilities, chief technology officer Maher Hakim says.

"There's an impression out there that Oracle, Ariba, and Commerce One have locked up the business-to-business market," says Vernon Keenan, an analyst at Keenan Vision. "That's definitely not true. It'll be months, if not years, before we get an indication of who will win."

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