E-commerce venture targets complex buys

By Carolyn Duffy Marsan
Network World, 05/22/00

BURLINGTON, MASS. - Emptoris, a start-up that has designed e-commerce software for complex business-to-business transactions, launched last week with the announcement of a commercially available product, several initial customers and a cash infusion of $20 million.

Just 9 months old, Emptoris has created a Web-based system for large-scale purchases that involve multiyear contracts, volume discounts, product bundling and other factors. Electronic Procurement for Strategic Sourcing (ePASS) is targeted at multinational corporations, government agencies and trading communities.

"Most e-commerce systems focus on the transaction. But companies don't really conduct business by saying: 'Here's an item. Bid on it.' It's actually much more complex than that," says Avner Schneur, president of Emptoris.

The company's ePASS system can be used by buyers or sellers. Like other online procurement systems, ePASS lets users construct or respond to requests for quotes and handles all bidding-related communications. It also provides workflow capabilities to automate a process that is often otherwise conducted via phone calls and faxes.

What differentiates ePASS is an optimization engine that uses advanced mathematical algorithms to help users make purchasing decisions based on a combination of factors including performance, price, business capabilities and constraints. Users can run what-if scenarios based on criteria they've established, and the system will make purchasing recommendations.

"How Emptoris defines strategic sourcing and their value proposition to the strategic sourcing arena really stood out from other [e-commerce] vendors," says Lynne Harvey, a senior analyst with the Patricia Seybold Group in Boston. "I was also really impressed with the architecture they have and the technologies they are using... I hadn't seen anything like that."

One customer is MoveNet.com, a Web-based relocation service that lets users put corporate and residential moving jobs up for bid. A MoveNet.com user answers a series of questions about the move including the date and amount of furniture involved. Movers then bid on the job, and the site provides background about the movers to help the buyer make a decision. Once a mover is selected, all approvals are handled online. All MoveNet.com bidding is handled by Emptoris as a hosted service.

"Emptoris was able to do the bidding process based on quality, not just on price," says Gene Lemay, president of MoveNet.com, which also launched last week. "They are optimizing many different constraints and dates . . . Emptoris was the only one that could do that for us."

MoveNet.com has been testing the Emptoris service for a month, processing about 5,000 transactions per week. "So far, it's working great," Lemay says.

Emptoris' ePASS system is available as a hosted service or server software. The software version runs on either Sun's Solaris operating system with Oracle's database or on Windows NT with an Oracle or Microsoft SQL Server database. Written in Java, the ePASS system requires no software on the client machine - just a Web browser. It supports XML, Enterprise Java Beans and Secure Sockets Layer. Prices start at $300,000 per year, plus fees for professional services, maintenance and transactions.

In early May, Emptoris closed $20 million in funding from Internet Capital Group (ICG), the premier venture capital firm in the business-to-business arena. Other ICG e-commerce companies include IndustrialAmerica and VerticalNet.

Emptoris: www.emptoris.com