Update: IBM, Ariba, i2 Form E-commerce Alliance

FRAMINGHAM (03/08/2000) - IBM Corp., Ariba Inc. and i2 Technologies Inc. today announced an alliance that company officials say will further fuel the sizzling growth in business-to-business e-commerce.

Calling the alliance the first of its kind, the companies said the new partnership will offer integrated, end-to-end business-to-business e-commerce services. The alliance will join Irving, Texas-based i2's TradeMatrix marketplace system and the Ariba business-to-business e-commerce platform with IBM technology to let businesses quickly build and deploy full-service online marketplaces, company officials said.

"What this alliance is about is leading the second industrial revolution," said Keith Krach, chairman and CEO of Mountain View, Calif.-based Ariba, referring to the rapid growth in business-to-business e-commerce.

Some analysts predict e-commerce revenues will top $3 trillion worldwide by 2003.

The alliance will speed e-commerce development by providing companies with tools that will enable them to quickly compete in the rapidly expanding business-to-business marketplace, officials said. Companies looking to enter or expand their e-commerce business can choose an array of services to meet their particular needs.

The alliance plans to build on the strengths of each of the contributing companies, integrating Ariba's procurement expertise and i2's networking and logistics capabilities, along with IBM's WebSphere Commerce Suite software and hosting, hardware and platform technology.

IBM, which will make an undisclosed investment in both of its partner companies, will capitalize on the alliance by using the integrated service for much of its $45 billion in procurement spending.

For current customers of the three companies -- many of whom participated in the press conference announcing the alliance -- today's news was met with applause and optimism.

"This is a big step forward in the development of e-commerce," said Ed Gilligan, president of corporate services at American Express Co. in New York, which is working with Ariba to develop e-commerce payment tools.

Analysts had mixed reactions.

The alliance "could accelerate the time to market for some of these exchanges," said Vernon Keenan, founder of Keenan Vision Inc. in San Francisco. "(But) a lot of times these relationship don't blossom."

Adrian Gonzalez, an analyst at ARC Advisory Group in Dedham, Mass., said the new venture holds promise because the strengths of the three companies complement each other.

"You've got three big b-to-b hitters here offering different thing to the mix," he said. "(But) if you get three big heads in a small room, the chances of bumping and bruising heads increases."

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