|December 4, 2000|
Customers Say Marketplace Leaders Can't Do It All
Multiple software providers are often needed to support the complexities of online trade
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Omnexus, an E-marketplace for the plastics processing industry, is among the newly aware. Launched in June, the company turned on its trading engine last week. Building that platform took four months of customizing Ariba's Marketplace software to support ordering from multiple companies in one transaction and integrating with suppliers. Omnexus is now evaluating how to incorporate payment settlement, contract negotiation, and customizable catalogs, none of which Ariba provides.
"You have to go in with your eyes open," says Stan Vlasimsky, chief operating officer of Omnexus, in Atlanta. "Ariba and Commerce One are relatively new products. They don't provide everything you need, but it's very unlikely that one software vendor is going to provide everything."
As marketplace operators turn to multiple software providers or in-house staff to support the complexities of online trade, some on Wall Street are saying that Ariba and Commerce One aren't the be-all and end-all of B-to-B. Wit Soundview analyst David Mahoney last week downgraded both companies to a "hold" rating, citing concerns about their ability to support more than simple catalog and auction transactions for office supplies and maintenance repair and operations products.
The greater opportunity, he says, is in automating the purchase of materials critical to manufacturing supply chains. He says supply-chain-management software and application integration vendors are better able to provide those capabilities because they help companies share data with close-knit trading partners. "That's really what's going to drive B-to-B," Mahoney says. "It's information, not transactions."
Richard Williams, a financial analyst at Jeffries & Co., says several marketplaces Commerce One helped launch are finding the software isn't robust enough to handle high volumes. "Before [Commerce One] can sell to new customers, they have to fix those problems," he says.
Simplexis, an E-marketplace for K-12 public schools, was concerned about the scalability of Commerce One's Buy Site. Each of nearly 50 school districts that have implemented Simplexis has access to its own instance of Buy Site on a Windows NT server. "I had reservations using Commerce One for large implementations," says Vipin Chawla, chief technology officer at Simplexis, in San Francisco. Version 6.0, available now, addresses those concerns, he says, because it lets Simplexis deploy multiple instances of Buy Site for a big school district. A single instance of Buy Site can support 6,000 concurrent users, according to Commerce One benchmarks.
The vendors are taking the criticism in stride. "We're continually bringing out new releases," says Chuck Donchess, Commerce One's chief strategy officer. "There's a huge horizon of capability we envision delivering to marketplaces."
Photo by Bob Mahony
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