March 2,1998

Electronic-Business Developers --
Doing battle over mind share

By Pedro Pereira & Jerry Rosa

New York -- Electronic-business developers are elbowing to gain mind share among channel companies plunging into channel assembly.

Developers PcOrder.com, Calico Technology Inc., Elcom International Inc. and Spaceworks Inc. are pitching such tools as electronic configurators, online catalogs, order-entry devices and inventory-tracking engines.

The developers jumped into the frothy waters of channel assembly because of problems posed by the myriad of vendor systems that interface with the channel. Hooking up to all vendors' systems is difficult because of the differences between each system.

While these developers pitched their tools before the advent of channel assembly, they now are finding more success in forging partnerships with integrators and distributors. Channel assembly has instilled an urgency to automate configurations and inventory management.

A year ago, distributors and integrators preferred, for the most part, to develop the technology in-house. But an increasing number have turned to licensing bits and pieces of the developers' technology, said PcOrder.com President Christy Jones.

CompuCom Systems Inc., MicroAge Inc. and Entex Information Services Inc. are among the companies that use Austin, Texas-based PcOrder.com technology, which provides data for ordering, price comparisons and configurations.

Ed Anderson, president and chief executive of CompuCom, Dallas, said PcOrder.com has won the battle between the technology providers because it has the most comprehensive offering. "It's over," he said. "There is no battle going on because PcOrder.com won."

Calico does not believe the fight is over, said Ashish Mohindroo, manager of strategic marketing for the San Jose-based software developer, whose clients include Tech Data Corp.

"We believe PcOrder.com is a very proprietary model and they restrict you. We believe in open standards. As far as configuration goes, PcOrder.com's configuration technology is based on the needs of the late '80s, and it hasn't changed," Mohindroo said.

But PcOrder.com's Jones is confident about her company's position, saying it not only offers broad range of applications, but it is looking for technology partners to provide value-added functions, such as tracking the costs of freight and taxes, online credit applications and credit-card transactions.

"We're very pleased with the progress we made over the last year," she said. "We really don't see a lot of competitors out there, and maybe that's because what we offer is a little broader. " Rockville, Md.-based developer Spaceworks, which licenses its technology to distributor Merisel Inc. and reseller Pomeroy Computer Resources Inc., has a tool called OrderManager. Rather than develop a host of applications, the company sticks with its main product and seeks partnerships with other software developers when appropriate, said Liz Sara, Spaceworks' vice president of marketing.

"In a couple of cases, we have walked in to visit a company with Calico, for example," Sara said. "Depending on what the particular client needs, we're prepared to partner with another company."

Though willing to partner with other developers, Spaceworks nonetheless is adding functionality to its product. Version 3.0 of OrderManager will contain a router feature that sends orders to supervisors for approval when a purchasing department employee exceeds spending limits, said Sara.

Integrators and distributors involved in channel assembly have invested millions of dollars and want to make sure they get a return on that investment through a narrowing of the pricing delta between indirect and direct vendors.

A robust electronic infrastructure is necessary because channel assembly changes the playing field, from one based on using a tool to find product availability to one where a tool can predict when a product arrives in a company's warehouse. CompuCom's Anderson calls it "product arrivibility."

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