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Business-to-business technology and services specialist CommerceQuest Inc. announced today it has created five online marketplaces where it will integrate the trading activities of more than 300 companies in industries as diverse as plastics, insurance and aviation parts.
CommerceQuest said its Net trading system will be driven by two IBM Corp. S/390 mainframe computers, as well as Big Blue's MQSeries middleware and DB/2 database software. IBM is touting the deal as proof that its mainframes can provide a viable, cost-effective option for building large-scale Internet projects.
Online marketplaces provide an infrastructure where companies can exchange procurement orders, invoices, and other information needed to buy and sell goods over the Internet. CommerceQuest has developed a system it calls enableNet, which includes software and tools that allow firms to exchange information between a variety of applications and platforms.
"We go to the customer's mainframe, pull the data out and move it to enableNet.
Then we do the translation and send the data out to whoever needs it in a format they can use, be it EDI (electronic data interchange), a flat-file format or something else," said Gary Davis, vice president of marketing at CommerceQuest, in a phone interview yesterday.
Companies that take part in the trading networks benefit from reduced supply-chain costs and shorter inventory cycles, and can react more quickly to market demands, Davis said. Outsourcing the process to CommerceQuest also means the trading partners also don't have to foot the bill directly for building and managing the network.
Initial customers for the service include aviation parts supplier AviEx, insurance provider UIP, e-Chemicals.com, PlasticsNet and online procurement firm ICGCommerce. ICGCommerce expects to be doing business valued at between US$4 billion and $5 billion through its system by the end of next month, according to CommerceQuest.
CommerceQuest looked at lower-cost Unix or Windows NT-based systems to support its operations, but opted for the IBM mainframes because the machines provide the most reliable and secure platform, according to Davis.
"Obviously, the initial costs were heavy, but we needed a system that offers the peace of mind our (trading partners) need for their critical applications," he said. "This was a no-brainer if we want the ultimate in up-time and availability."
The mainframes also give the company headroom to grow its services in the future. CommerceQuest hopes to expand its system to include 60 online markets by the end of the year, and possibly hundreds in the future, CommerceQuest Chairman Colin Osborne said in a phone interview yesterday.
"The mainframe is a delightfully extensible beast. We can just keep adding capacity to it, and that's why we chose it," Osborne said.
Osborne and other CommerceQuest officials declined to say how much the company has spent on the two IBM mainframes. Such systems typically cost hundreds of thousands of dollars.
Not surprisingly, IBM is touting the deal as evidence that its mainframes can compete with Unix and NT-based systems in large "dot-com" companies. One analyst said the increasing volumes of data being exchanged on the Internet, and the massive volumes of online transactions that the largest companies need to process, mean other companies may take a similar route.
"I see a possibility that more mainframes will be used to power all kinds of applications on the Internet," said Ken Vollmer, a senior analyst with Giga Information Group Inc. in Cambridge, Massachusetts, in a phone interview yesterday.
CommerceQuest, in Tampa, Florida, can be contacted at +1-813-903-3000, and on the Web at http://www.commercequest.com/.