FRAMINGHAM (04/11/2000) - More than a dozen global energy and petrochemical companies, including Royal Dutch/Shell Group and Occidental Petroleum, have founded a B2B (business-to-business) trading exchange for purchasing goods.
Commerce One will supply the underlying software technology for this petrochemical exchange, which has not yet been named. One of the exchange partners, Dow Chemical, says it plans to use it to purchase goods such as pipes, pumps, and valves.
Dow Chemical's suppliers haven't been officially notified about the nascent online exchange, said Dow Chemical spokesman Peter Paul van De Wijs. As currently planned, use of the exchange won't be mandatory for chemical company's suppliers. The online marketplace "will be an additional tool to help us manage suppliers," van De Wijs noted. Fax, phone, and EDI (electronic data interchange) are some of the various ways Dow Chemical places orders with suppliers today.
For each item sold through the online exchange, the supplier will have to pay a percentage of the goods' price. That fee is not yet set. The petrochemical giants also aren't disclosing how much they are investing to get the marketplace up and running, which is expected to occur this fall.
The exchange's founding members are BP Amoco, Conoco, Dow Chemical, Equilon Enterprises, Mitsubishi, Motiva Enterprises, Occidental Petroleum, Phillips Petroleum, Repsol-YPF, Statoil, Tosco, TotalFinaElf and Unocal.
As trading exchanges begin to spring up, there will be a growing need for buyers and sellers to extend their established business-to-business extranets to be able to purchase or sell goods on these large marketplace sites.
Ironside Technologies said it has started developing software for its IronWorks gateway, which is typically hosted at a corporate Internet access point for Web-based business-to-business trading, so each gateway could be extended to link to exchanges based on Commerce One, Ariba Technologies, RightWorks, and Claris.
The IronWorks gateway allows business customers to place orders online by providing them a controlled Web view into back-end systems, such as ERP (enterprise resource planning) suites from J.D. Edwards or SAP.
This week, a key Ironside competitor, HAHT Software, announced it is ready with HAHT SellSide Links, code that can extend the HAHT business-to-business gateway called Commerce e-Scenarios. This way, the HAHT commerce server could share trading information with an Ariba, MySAP.com, or the Commerce One marketplace.
Commerce e-Scenarios costs US$450,000, but the SellSide Links software will be priced on a monthly subscription basis of a few thousand dollars, says HAHT Software President and Chief Executive Officer Rowland Archer. "SellSide Links is an alternative to having to write this code on your own," he added. By July, HAHT Software plans to have ready HAHT SellSide Exchange, a version of the SellSide Links that would be used by a ASP (application service provider).