Microsoft Gives B2B a Boost with Supplier Software
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NEW YORK (Reuters) - Microsoft Corp. (Nasdaq:MSFT - news), seeking to give a boost to the flagging market for business-to-business software, on Tuesday announced a new software package to bring more suppliers on line.
Business-to-business exchanges, which bring together buyers and suppliers over the Web, burst on to the high-tech scene in late 1999 promising to save companies millions of dollars by linking them with thousands of suppliers over the Web.
But, to date, suppliers have been reluctant to sign up because they fear their goods will get commoditized alongside cheaper alternatives.
Furthermore, getting products online is a long and expensive process and with the largest e-commerce firms -- Commerce One Inc. (Nasdaq:CMRC - news) and Ariba Inc. (Nasdaq:ARBA - news) -- pushing different Internet standards, many suppliers don't know where to begin.
Microsoft said its latest offering, which it's calling the ''Microsoft Solution for Supplier Enablement,'' is the culmination of its previous B-to-B efforts. Now, though, the company said it is delivering on the technology, as opposed to talking about it.
``What we announced before was the initiative, but there was no ready-made solution for suppliers to use out of the box,'' Tom Rizzo, Microsoft's group solutions manager told Reuters in a telephone interview on Tuesday.
Last year, Microsoft kick-started its supplier enablement strategy when it announced its ``Supplier Accelerator'' initiative. Then, in May, the software giant backed that up by forming a partnership with Commerce One for the same purpose. But those efforts have been slow to take off.
``Before they had to patch it together,'' Rizzo said, adding that this time Microsoft has provided specific connectors to purchasing software and online marketplaces from Commerce One, Ariba and Clarus Corp. (Nasdaq:CLRS - news), among others.
A host of companies -- including Compaq Computer Corp. (NYSE:CPQ - news), Commerce One, and Ariba -- said they supported Microsoft's initiative. In addition, Microsoft said it had the backing of systems integration and consulting companies such as Accenture Ltd. (NYSE:ACN - news) and Cap Gemini Ernst & Young to help it install the software for large corporations.
``I think they'll be successful in the mid-market because they're really spending a lot of time understanding those suppliers' needs,'' said Louis Columbus, an analyst with AMR Research in Boston, who added that getting suppliers on line was a ``huge problem'' facing the industry.
BASED ON '.NET'
The offering is based on Microsoft's .Net Internet services strategy, which combines Microsoft's various .Net server computers including its BizTalk integration server, Commerce Server 2000, and its database software, SQL Server.
The technology uses XML, for eXtended Markup Language, which is the standard language used by companies to communicate over the Internet.
``We have worked closely with a wide range of suppliers to understand the issues they face and ways they would like to optimize their businesses,'' Chris Atkinson, vice president of Microsoft's .NET Enterprise Solutions, said in a statement on Tuesday.
Microsoft said early adopters of its new supplier software, such as rubber stamp manufacturer MarkMaster, are already seeing improved efficiencies and cost savings as a result of using the software.
``The solution ... gave us the ability to rapidly connect to a vast array of customers previously unavailable to us,'' said Kevin Govin, chief operating officer of MarkMaster. in a statement. ``We're expecting that this capability alone should increase our sales by over 35 percent.''
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