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Intelisys fights for mindshare

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Intelisys Electronic Commerce Inc. has tapped the charismatic marketer who put the "zip" into Iomega Corp. to help make it a contender in the hot market for e-hub software.

Under Michael Collins, the company's new VP of worldwide marketing, Intelisys will debut today a $20 million campaign to help it cut through the b-to-b clutter.

The company will roll out a new logo and the tagline "Powering e-Marketplaces" as part of a comprehensive marketing and advertising strategy designed to differentiate itself from better-known competitors such as Ariba Inc., Commerce One Inc. and Oracle Corp.

These rivals have won early marketing battles against Intelisys, which sells Internet purchasing software and services.

"I wouldn't say our marketing was bad. I'd say it was non existent," Collins said.

It was Collins' job to change that--and fast.

Collins came on board a mere three months ago, following a meeting at a Starbuck's coffeehouse in New Caanan, Conn., with Intelisys' CEO Lloyd O'Connor. The duo sketched out the Intelisys "brand battle plan" on coffee cups and napkins. Collins' job was to assemble a team and get the program moving within 90 days.

Collins conducted his recruiting during a trip to Puerto Rico; working the phones, he managed to hire a complete team of top lieutenants from contacts he'd made over the years. His seasoned team operated "in a type of shorthand" that made quick work possible, Collins said.

"Most companies can only dream of landing this type of talent," he said. "As our marketing unfolds, we're thinking our competitors are going to wake up to a nightmare that they've been out-marketed and out-sold."

At stake is a potentially huge market.

The average e-marketplace will spend $3.8 million on software and internal development to get to the point of handling transactions, said Lisa Williams, analyst at The Yankee Group, Boston. With just over 1,000 e-marketplaces in existence today, and 4,070 expected to develop by 2004, vendors of e-marketplace software and services are poised for tremendous growth.

"If competitors stumble on execution, Intelisys could be in a good position," Williams said. "There's a bit of announcement-fatigue on the subject of exchanges. People are saying, `where's the beef?' The next phase of this battle is execution."

Plan of attack

To win that battle, Intelisys will position itself as an e-marketplace platform provider capable of easily linking small and midsize businesses to newfangled b-to-b exchanges. In brand materials for several of its already operational exchanges, Intelisys has purposely chosen to take second-fiddle status in positioning and placement. Such clients as Chase Manhattan, First Union Corp. and Intuit have the most prominent positions.

"We're positioning Intelisys as an ingredient brand, not much different than NutraSweet or `Intel Inside,' " said Collins, a former marketing executive at Software AG spin-off Saga Software, and Iomega Corp., where he worked on marketing the wildly popular ZipDrive brand of storage products.

Intelisys has been a dark horse in the Web procurement/e-marketplace arena, concentrating most of its effort on engineering its software. But it has neglected to spend much time on marketing, constrained by a lack of resources.

While Ariba and Commerce One have raised a war chest of cash through Wall Street, Intelisys is still privately held. In January, when Collins joined, the four-year-old company had six marketing-department employees. Today, it has 26.

Some question whether Intelisys was too slow to get off the stick. After all, Ariba, Commerce One and Oracle have had incredible success wrapping their messaging around the phenomenon of b-to-b trading. The money being used in Intelisys' $20 million campaign was raised as part of a $65 million round of venture financing in 1999. Why did it wait until 2000 to get going?

"We believe first-mover advantage in this market is perishable," Collins said. "Ariba and Commerce One have helped shape the pie, and taken a few bites out of it."

Intelisys has also had a low profile on the public relations' side. As Ariba was partnering with the likes of Chevron Corp., and Commerce One and Oracle were aligning with Ford and GM, Intelisys eschewed the limelight. Its approach of leading companies from basic purchases to more advanced buying is the way

to go, executives said. And Intelisys is counting on its competitors to slip up, Collins said.

"If you peel the onion back on some of the deals being announced, they are really nothing more than press releases," Collins said. "Ariba and Commerce One are focusing on procurement of direct materials, and those are hard systems to digest. They are deals that are probably easier to put in a press release rather than put in practice."

Competition responds

Meanwhile, Intelisys competitors aren't shrinking from the challenge.

Topping the list is Mountain View, Calif.-based Ariba, the leader among these vendors in revenue and cash flow. Last quarter, Ariba doubled its customer base. Moreover, it enjoys much of the credit for introducing the notion of Web procurement. Now the company is looking to expand a passel of top-tier procurement clients into a leading position among e-marketplaces. Rob DeSantis, chief marketing officer for Ariba, said the No. 1 position is the place to be.

"We don't believe changing logos or spending $20 million on an advertising campaign alone is a way to change your marketing plan," DeSantis said. "We've always had an integrated marketing plan. We believe in a 20-chess-move plan that, as we hit different times in the market's life, we execute different moves."

Commerce One, meanwhile, believes the marketing war over e-marketplace wares has yet to really heat up, said Kit Robinson, senior director of corporate communications.

Commerce One changed its logo in January, and added the tagline "many markets, one source." In fact, the high profile the company has enjoyed so far has been largely due to having the right product, not advertising, Robinson said. Commerce One will launch its first integrated marketing campaign later this year.

"To date, we've done very little advertising," Robinson said.

"Ariba, Commerce One and Oracle have gained a lion's share of business among the Fortune 1000," Tim Minahan, analyst at the Aberdeen Group, said. "Intelisys' marketing efforts have been lackluster to date. But I believe Intelisys' new branding as an e-marketplace platform provider is highly effective."

From the customer's point of view, there is still a sales job that needs doing, Brian Caffrey, president of the consulting firm Solcon Group, New York, said. The former director of materials management at the American Red Cross, Caffrey advises some of the largest companies in the U.S. on purchasing strategy.

"All of these companies have a heady task ahead of them," Caffrey said. "Based on my discussions, not everyone is entirely onboard with the idea of doing direct-materials buying over the Internet. Obstacles real and perceived are still there in the minds of many decisionmakers. The market is very, very young."

The Intelisys brand awareness campaign debuts in print today with an ad that carries the tagline "B2B for All." It features a child holding a cat's cradle, and stresses the network's ease of use. Alongside the ad, the company's new yellow logo resembles many different points converging--a motif that underscores the trading connectivity Intelisys can deliver to businesses.

"We did an audit of our old logo," Collins said. "The key thing we took away from that audit was that our logo was friendly, but generic and nondescript. There was no visual or verbal identity."

The advertising--appearing in the Wall Street Journal, Fortune, Forbes, Fast Company and all the way down to regional newspapers--are supported by a redesigned Web site, which debuted on May 1. Comprehensive Webcasts, seminars and trade shows have also been scheduled.

Intelisys' brand identity was led by Fitch Inc., Columbus, Ohio. Corporate advertising was developed by Duffy & Shanley, Providence, R.I. Developing Intelisys' channel marketing is Y&R 2.1, New York, while Axis Communications, Washington, is doing collateral for the campaign. Market research and segmentation is being handled by DRC Group, Austin, Texas.

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