Hosted supply chains challenge B-to-B exchanges

By Eugene Grygo, InfoWorld |  Software

Hosted supply-chain solutions are giving business-to-business trading exchanges a new challenge by offering suppliers an environment that for the moment may have more appeal than the buyer-meets-seller services of exchanges, according to analysts and vendors.

Recent events have underscored the often industry-specific and compelling role that hosted supply-chain ASPs (application service providers) could play.

Late last month, Bidcom Inc. and Cephren Inc. merged to create Citadon, a San Francisco-based ASP of collaboration and commerce services for the buyers and sellers who join forces on construction projects.

In a similar vein, Aqueduct Inc., formerly BuyNow, in Aliso Viejo, Calif., which provides outsourced e-commerce services for retail hardware, software, and consumer electronics manufacturers, announced last week that it has completed a second round of venture capital funding. Aqueduct aims to streamline the distribution and communication channels between retail suppliers and its customers using a platform with modules for online store planning, design, and management; a hosting infrastructure; order processing; payment processing; and risk management, among other services.

In response to changing conditions, Commerx, after the resignations of its co-founders and the naming of an interim CEO late last month, has solidified its new role as an ASP that offers an integrated suite of online e-procurement and collaborative supply-chain applications.

The company is no longer a creator of public e-marketplaces, Commerx officials said in a prepared statement. The company withdrew its IPO and cut staff in response to Wall Street's shrinking support of b-to-b and related e-commerce efforts, officials added. The Commerx PlasticsNet marketplace that it fostered will become an informational site, said a spokeswoman for the Chicago-based company.

Established players such as i2 Technologies and Manugistics have also begun to offer hosted options.

The backers of these hosted supply-chain options see themselves as providing suppliers with strong branding and business-to-business relationships -- two major advantages over what they see as the flawed and limited meet-and-transact services of exchanges.

"We think the exchanges are kind of the antithesis of what we're really building our business on," said Corey Hutchison, CEO of Aqueduct. "[But] the exchanges certainly have to be something that we offer our customers a chance to hook into." Those extensions, however, will not be a major driver for Aqueduct. "I look at exchanges the way I look at e-tailers, as just one additional channel that customers might want to be involved in," Hutchison said.

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