InformationWeek

Consider the requirements: In the next phase of E-business, "customers want one vendor to provide all the pieces that make automated buying and selling of direct goods seamless, linking transactions to order fulfillment, manufacturing supply chains, inventory replenishment, and transportation," says AMR Research analyst Pierre Mitchell. "Customers don't want to deal with the hassle of integrating all the disparate software pieces, costing them millions of dollars and years of work."

Maybe not; but vendors are a long way from meeting those needs. Businesses are moving beyond their initial online-procurement forays and into online procurement of indirect goods, such as maintenance, repair, and operations supplies. At the same time, E-marketplace models increasingly involve hundreds or even thousands of suppliers and buyer organizations that have to meld procurement software with functions such as order fulfillment and automated inventory replenishment, as well as logistics, customer-relationship management, and payment software. These software packages also must accommodate partners across international boundaries, taking into account export, language, and currency requirements.

"The problem is that customers don't have robust, interoperable software suites for end-to-end E-commerce from a single vendor, and they have to cobble together solutions from different vendors," which is a costly and slow process, says Laurie Orlov, research director for E-business applications at Forrester Research.

It's probably impossible for any one company-even the leading vendors of database, enterprise resource planning, and E-commerce software-to provide everything. That's why so many vendors are scrambling to expand their offerings through internal development and via a frenzy of partnerships and mergers. But so far, their solutions are piecemeal. "No one company can offer all the pieces that a marketplace needs," says Boris Putanec, a co-founder and VP of commerce technology at Ariba Inc.

Until now, most of the vendors that have emerged in the E-commerce industry over the past two years have carved neat niches for themselves without too much overlap. Market leader Ariba specializes in shared services,

E-procurement, and buy-side software, and it serves as a portal for indirect supplies. Its rival, Commerce One Inc., excels in supply-side networks and providing some marketplace interoperability. Smaller startups, such as RightWorks, which began in procurement software, Tradeum, Tradex Technologies, and Trading Dynamics offer exchange and auction software for E-marketplaces.

Though traditional database and ERP heavyweights, such as Oracle and SAP, offer some E-commerce functions, their products have focused mainly on heavy-duty supply-chain and manufacturing processes that involve one-to-many or many-to-one marketplaces for businesses.

Most vendors stake out narrow slices of the market pie and offer partial solutions for users. For example, supply-chain management vendors i2 Technologies, Logility, and Manugistics Group have long emphasized savvy, automated supply-chain and inventory management. E-fulfillment and order management is in the court of Yantra, and catalog aggregation customization is handled by startups such as CardoNet, Cohera, Mergent Systems, OnDisplay, and Requisite Technologies. CRM for business-to-business users is just now being developed by companies such as Octane Software, Pivotal, SalesLogix, and Siebel Systems. Extricity and webMethods provide proprietary and Extensible Markup Language-based middleware and interfaces that allow uniform views of data from different suppliers and buyers.