e2open survives e-hub shakeout

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There are not many survivors in the world of b-to-b e-marketplaces, and few among those have bright prospects. Count high-tech e-market e2open among the handful that have been successful.

At the helm is President-CEO Mark Holman, who has spent his career helping companies such as General Motors and electronics contract manufacturer Solectron navigate in complex, turn-on-a-dime supply chain and manufacturing environments.

Belmont, Calif.-based e2open was founded by some of the world’s largest high-tech companies, including IBM Corp., Hitachi, Lucent Technologies, Nortel Networks and Toshiba Corp. Today, the exchange is delivering supply chain and product collaboration services via a bulletproof, hosted network to help global companies rethink how they conduct their business relationships.

BtoB recently caught up with Holman between jaunts to Asia.

BtoB: What phase in its evolution is e2open at today?

Holman: We’re through phase one, where we were building out our capabilities, and now we’re getting into deployments with customers. The last couple of quarters, we’ve had some significant customer wins, like [disk drive maker] Seagate Technology, which was announced, as well as several we’re not yet talking about publicly.

We’re finding that companies are really using the e2open network as essential glue in their architecture in a much more integrated fashion than we first envisioned.

BtoB: Why have you been successful while so many exchanges have failed?

Holman: The level of technical readiness in our industry was ahead of other industry sectors. Some of the things our industry has done, like XML deployments and the RosettaNet [standards] effort, got our companies ready earlier for this wave to occur.

A lot of this ends up being about the group dynamics of the people you put around the table. We are led by a very pragmatic group of people who understand how a supply chain can benefit a business. You can see it with our founders, the growing confidence they have in each other that they are moving in the right direction.

My sense is some other marketplaces in other industries didn’t get that positive momentum, and it forced them to retreat. In some ways, there is an element of a leap of faith here: I will invest and help to make this happen.

BtoB: What’s the biggest challenge facing e2open in the next year?

Holman: I worry that in the next six to 12 months, as we begin to aggressively touch our supply communities, that we’re going to get too many phone calls. As an organization, we have to monitor the amount of activity we can take on and successfully deliver.

Six months ago, we were selling vision. Now we have tangible products, and it’s getting easier and easier for people to look at us and see the value proposition we deliver.

At Seagate, the CFO’s been there 17 years in a tough, low-margin, aggressive business. He’s heard everybody’s pitch about how they’re going to change his company’s business processes. He saw how our tool could help him take cost out of his business. Without that, he told us, there’s no way he was going to make a buy decision.

BtoB: What would you rate as your biggest accomplishment as CEO of e2open?

Holman: Building and establishing a world-class global team. We did a very unusual thing for a start-up. The typical start-up would begin and incubate in one location, then in the third year of its life say it’s time to do the international thing. We were born with global founders and early on began putting in capabilities in all the major geographies. That required a lot of
effort early on, but we get real strength from that.

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