The Web's business-to-consumer slump has claimed a high-profile victim. Pandesic LLC, a joint venture formed in 1997 by Intel and SAP to provide E-commerce support for B-to-C E-retailers, said today it would cease operations. The company cited lower-than-expected demand in the B-to-C market and said that it could not foresee a timely road to profitability.
A Pandesic spokeswoman says the company will no longer take new customers but will work with its more than 100 existing customers in finding and transitioning to a new E-commerce vendor. She says SAP will work closely with Pandesic to determine whether the former has an appropriate alternative for Pandesic's customers.
Pandesic's 400 employees, located in offices in New York, Miami, London, Tokyo, San Francisco, and Folsom and Sunnyvale, Calif., will receive severance packages and assistance in finding new positions. Executive VP Catherine Yetts has taken over as interim CEO in the wake of the resignations of CEO Harold Hughes Jr. and president Pete Wolcott.
An Intel spokesman says that while the company was disappointed that Pandesic couldn't achieve profitability, he wouldn't rule out Intel's taking another crack at the B-to-C E-commerce market. "We're certainly not averse to trying new business ventures," he says.
Chris Selland, VP of E-business strategies for the Yankee Group, wasn't surprised by the Pandesic announcement. Selland says E-commerce vendors that focus on transactions--such as Pandesic and its competitor Open Market Inc.--are at a serious disadvantage. "That's not where the value is," he says. "It's all about customer relationships."