Microsoft opens b-to-b window

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Microsoft Corp. may have finally found its b-to-b niche: leveraging the ubiquity of Windows technologies to help small and midsize companies build on ramps to e-marketplaces.

Earlier this month, Microsoft launched E-Business Acceleration, an initiative to help suppliers reach buyers via sell-side sites, e-marketplaces and e-procurement platforms. Partners in the initiative include b-to-b vendors Commerce One Inc., Ariba Inc., VerticalNet Inc. and Clarus Corp, as well as integrators Andersen Consulting, Compaq Computer Corp., KPMG Consulting L.L.C. and Cap Gemini Ernst & Young.

There's no doubt that e-marketplaces are exploding. But "where are the suppliers? Without them, this party is never going to swing," said Chris Atkinson, VP of Microsoft's .Net Enterprise Solutions. The E-Business Acceleration effort will "enable suppliers of any size to sell to any buyer at any time, either directly or via any marketplace," he said.

The initiative taps Microsoft's strength: Its operating system and core server technologies are still the platform of choice for most small and midsize companies. Those companies are facing the difficult technical challenge of moving their trading relationships online with e-procurement and e-marketplace platforms.

It's a massive opportunity, with businesses expected to run almost half of all b-to-b e-commerce, totaling more than $3 trillion, through e-marketplaces by 2005, according to Jupiter Communications Inc.

Those are the kinds of numbers mass market-oriented Microsoft loves, and b-to-b watchers contend this may finally be the way for Microsoft-which has been very quiet on the b-to-b front-to make its mark in the booming sector.

"Going after business commerce, in the past, has not been something that's volume-driven," said Mike Ritz, director-Microsoft alliance for Clarus. "This focus on the supplier side of e-business is more typical of the way Microsoft goes after a market," he said.

Multipronged approach

The initiative includes several products and services. Targeting the very smallest companies is bCentral Commerce Manager, a new feature on Microsoft's small-business bCentral Web site. Commerce Manager makes it easy for small suppliers to plug into e-marketplaces using only a Web browser, and offers one consolidated view of orders across many customers and e-markets.

For larger suppliers, Microsoft will offer Supplier Accelerator, a package of tools including Microsoft Commerce Server, BizTalk Server and its entire .Net infrastructure, the vendor's initiative to "Web-ify" all its product offerings.

Microsoft, Clarus and Compaq will produce so-called ExchangePaqs, a bundled solution that will feature all the software, hardware and services to get companies started under the Supplier Accelerator program.

Clarus has been testing the new program with several customers, including a pilot with commercial real estate marketplace AvidXchange, Charlotte, N.C. Because its business is local by nature, almost 80% of potential suppliers for its exchange are small to midsize businesses, said David Miller, president of AvidXchange.

Ritz estimates e-marketplaces could see a 5% to 10% increase in sales if the Microsoft initiative can help boost the number of suppliers able to participate in a marketplace such as AvidXchange.

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