BtoB

BroadVision's big e-hub play

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BroadVision Inc. will announce today a sweeping plan to compete for b-to-b business among large corporations.

The company, which made a name for itself by providing storefront and personalization software to business-to-consumer retailers, will unveil two products aimed at providing companies with ways to buy direct and indirect supplies over the Internet.

BroadVision Procurement 1.0 will be available immediately. BroadVision Market Maker 1.0 will be available Sept. 29.

It is BroadVision’s surprise entry into the market-maker space that makes the announcement a blockbuster. And it’s the company’s expertise with personalization that could help it leapfrog entrenched marketplace providers.

The new products put BroadVision in direct competition with market leaders Ariba Inc., Commerce One Inc. and Oracle Corp. for a share of the marketplace software market. The new direction also aims to distance the vendor from commerce server rival Art Technology Group, which has scored some major wins over BroadVision in recent months. (See related story Page 2.)

According to The Yankee Group, about $3.8 million will be spent to create the average e-marketplace, and 4,070 such marketplaces are expected to develop by 2004. Thus, BroadVision is coming to claim its share of a that huge market.

Strong financials

BroadVision already has more than 900 clients using its software for content management, one-to-one marketing and retail e-commerce; and a few are already experimenting with its older software products in their e-marketplaces.

Analysts said one advantage BroadVision has is its financial statement. The software company’s $156.8 million in revenues are up 274% for the first two quarters ended June 30. And it has actually turned a profit, a rarity among Net companies of any sort. At $20.7 million, net income surged 229% during the same period.

Moreover, BroadVision’s $12 billion market capitalization gives it the financial clout to acquire b-to-b companies it needs to continue to expand, analysts said.

"By the first quarter of 2001, BroadVision will have a complete b-to-b solution,’’ said Albert Pang, e-commerce software analyst for the research firm IDC Inc. ‘‘It has a big customer base, and many of its customers haven’t decided on a b-to-b strategy yet."

Pang said the jury was still out on how Ariba, Commerce One and Oracle will be able to penetrate this market from the high-end Fortune 500 down to the small companies. "There’s room for them here," he said.

Yet Ariba, Oracle and Commerce One have big leads in mind share. That means the execution of BroadVision’s marketing for Market Maker and Procurement will be critical, said Randy Covill, senior analyst for e-commerce strategies and applications at AMR Research Inc.

Market Maker works in two ways. It can be used to create a corporate buying hub with thousands of suppliers competing for a company’s purchasing activities, or as a platform for a neutral company to run an industry exchange. The Procurement product allows employees to buy from their desktops and manages purchasing.

Analysts also noted that b-to-b procurement and e-marketplace applications require extensive custom development. BroadVision’s efforts will need to overcome the fact that Ariba, Oracle and Commerce One have built armies of purchasing experts to tailor each marketplace.

"The problem BroadVision has is domain expertise," said AMR’s Covill. "That expertise is what BroadVision will need."

BroadVision plans a major marketing blitz that will jointly pitch Procurement and Market Maker, said Pamela Dunn, product marketing manager for Procurement. It will leverage several upcoming BroadVision marketing events and include joint promotional marketing programs, print and TV advertising, and direct marketing, she said.

BroadVision’s budget is undisclosed, Dunn said. However, Intelisys Electronic Commerce Inc. recently launched a $20 million integrated marketing campaign. As a much larger company, BroadVision will likely far eclipse that number in its marketing effort.

The Market Maker product is expected to be priced between $500,000 and $1 million, though company executives declined to pinpoint a figure. If it’s in that range, it will be lower than most of its competitors.

For its part, BroadVision says that its experience in retail customer service will give it an advantage in b-to-b.

"What’s missing today is the focus on the customer," said John Roberts, senior product manager for Market Maker. BroadVision will focus on providing custom buying pages and other forms of content to give business buying more pizzazz, he said.

Showing traction

Already, BroadVision is showing some traction in the b-to-b sphere. Serveral customers are using modified versions of older BroadVision products to run e-marketplaces.

For instance, IDmarket.com is using BroadVision for its one-to-one marketing capabilities, said Fritz Maxwell, VP-marketing for IDmarket.com.

IDmarket.com lists over 300 different products for packaging and identifying commercial products, but the average buyer needs only three or four. The company has created a platform that shows buyers only those products relevant to their needs, and factors in each customer’s shipping policies to weed out far-flung vendors when the buyer says it has a geographic limit.

Rockwell Automation’s power systems division has been another guinea pig for BroadVision’s b-to-b development. The unit, which sells such products as motors, bearings, drives and gearing boxes to mechanical engineers, has 550 customers visiting its e-marketplace.

The company already presents content individualized to the buyer, including sales contacts, order status on offline and online purchases, and geographic location. It plans to begin accepting credit card payments for sales that will be passed along to one of its regional distributors.

"We’re already going to the next level and acting as mailman for our distributors," said Darcy Mauro, sales and marketing manager for the power systems division. "It was the ability to customize content that convinced us to go with BroadVision. We were the first in our industry with an e-commerce site. When you are first to market, you want to build trust with your customer and you don’t want to skimp on functions because it is your customer’s first buying experience."

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