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By John Evan Frook SpaceWorks Inc. is about to elbow in on a whole new turf. The company, which develops catalogs and order-processing applications for sellers in the business-to-business market, will add buyer tools in OrderManager 3.0 so that sellers can use the same platform for their internal purchasing. The upgrade includes workflow applications for the requisitioning and approval of goods and services. It will ship later this month. In joining buyer tools with sales tools, SpaceWorks becomes the latest vendor targeting corporate IT epartments with an end-to-end approach. Larry Lokey, director of professional services marketing at Pomeroy Computer Resources Inc., a $491 million reseller and network integrator, went with SpaceWorks because it had a solution that could scale to 30,000 products and beyond, provide complex catalog searching, provide real-time pricing and availability, and integrate orders into existing business applications. "This type of system is becoming a given-a stay-in-business solution," Lokey said. "SpaceWorks has not once asked us to change the way we do business to fit their model. That was key." Pomeroy expects a 20 percent reduction in call center and sales costs in its first year of deployment. SpaceWorks is not relying solely on new software to drive sales. The company said it will soon announce the EC Guarantee program, which promises to deploy OrderManager fully within 60 days, including integration with legacy or enterprise financial applications. If SpaceWorks fails, it will refund software license fees (ranging from $100,000 to $250,000) or provide a free year's worth of service. The EC Guarantee program turns the competition up a notch. In promising a full refund, SpaceWorks extends its try-before-you-buy approach, launched last year, to take on some of the customer's risk. SpaceWorks' guarantee pledge comes just as other companies tout deployment speed as a competitive advantage. BroadVision Inc., Connect Inc., IBM and Open Market Inc. are among a growing list of vendors boasting of deployments in less than two months. By providing both sides of the equation, SpaceWorks has thrust itself into competition with Ariba Technologies Inc., Commerce One Inc., Elekom Corp. and others developing applications that manage the nuances of purchase approval hierarchies, prenegotiated rates and fulfillment tracking on both ends. Executives at rival electronic-commerce vendors characterized the guarantee program as an act of desperation. Also, they said they doubted SpaceWorks would attract pure buyer-side customers who don't sell goods over the Internet. But Yankee Group analyst Henry Tse said SpaceWorks should be given its due, noting the company's five-year track record developing robust sales tools can't be discounted. "They've had very good executions on the seller side, especially for distributors of industrial products" such as computer components, Tse said. "They have concentrated on network selling systems for large resellers. They have domain expertise for that area and have been successful so far." SpaceWorks has taken the approach that it requires both software and services to make successful deployments tick, with about two-thirds of its revenue coming from service. Though it will work to invert the software/service split down the road, SpaceWorks president and CEO David MacSwain said the service work is necessary to avoid wreaking havoc on a customer's business. "There's a huge opportunity to re-engineer the enterprise with these technologies," MacSwain said. "One can completely rethink how to run a business and manage a sales channel. But it is a step-wise process to pull it off. "Initially, these systems need to be viewed as an analogy to the old style of doing business, and that requires a lot of straightforward mapping. We ease people into business-process re-engineering."
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