_______ Article 46 of 64 _______

E2open.com picks PartMiner ; Massive industry-backed exchange will cooperate, not compete, with independent. (Brief Article)
RICHARD KARPINSKI

Formally launched in June, e2open-backed by electronics and computing giants IBM Corp., Lucent Technologies, Acer Computer International Ltd., Matsushita Electric Industrial Co. Ltd., Toshiba Corp. and others-could have just as easily decided to crush the smaller PartMiner, which launched in June 1997.

Opting to cooperate

Such a take-no-prisoners strategy is how many coalition marketplaces address the independents, leaving many pioneering market-makers struggling to find a role to play. Some 40 industry consortia have been announced to date.

By contrast, PartMiner and e2open think they have a better, cooperative solution, one that can aid both players and, ultimately, benefit the buyers and sellers using their respective marketplaces.

``There's been a cloud hung over the b-to-b space as a result of these consortium announcements,'' said PartMiner CEO Dan Nissanoff. ``This is going to be a deal that will shed a lot of light on what the winning business models are going to be.''

The partnership is not a surprise. When e2open.com opened for business in June, the same week PartMiner debuted a new strategy for its marketplace that focused on free basic services complemented by for-fee matchmaking and liquidation services. (See ``PartMiner.com drops fees for transactions,'' June 19, Page 38.)

In fact, analysts have been waiting for a consortium and independent marketplace to cooperate.

``Savvy independents will partner with smart coalitions, and this cooperation illustrates another of the many ways the independents and consortia can work together,'' said Tim Clark, an analyst with Jupiter Communications Inc.

The PartMiner partnership will significantly jump-start the e2open.com marketplace. In a three-year deal, PartMiner will provide technology, services and access to its catalog of more than 12 million electronic parts. PartMiner will receive a few million dollars for technology and services.

More important for PartMiner, it will act as the exclusive matchmaking service for e2open. If a buyer cannot find a part it needs from its on-contract suppliers, PartMiner will step in and help source new suppliers and ensure on-time delivery of these important direct materials, charging a fee for the service.

PartMiner's Nissanoff estimates that the average big buyer will likely have to send 10% to 20% of its supply chain transactions to this spot market, either because suppliers lack inventory or because they want to test for a better price. E2open members have committed to deliver ``hundreds of millions of dollars'' of spot sourcing to the PartMiner marketplace, he said.

PartMiner prepared for such a partnership when it recreated its business model back in June, swapping transaction fees and subscription revenues for value-added market-making services.

Interestingly, PartMiner built its site with extensive help from e2open's lead vendor, IBM. Although they were completely surprised when the seemingly rival e2open launched earlier this summer, PartMiner execs immediately began pitching the idea of teaming with the massive electronics marketplace.

Beyond the IBM connection, the two companies shared a venture capitalist in Adam Dell, brother of Dell Computer Corp. CEO Michael Dell. The two companies banged out an agreement this summer, deciding on a partnership rather than an acquisition because the market is huge, with each providing a unique rather than competitive service to industry buyers and sellers, Nissanoff said.



Article A66237672

View other articles linked to these subjects:

Online services

_______ Article 46 of 64 _______