Aggregators Move to Catalog Hosting Model

Computergram International, March 8, 1999

By William Fellows

Catalogue aggregators such as Ariba Technologies and Chicago- based Intelysis are building out new business-to-business portals and custom web sites on which suppliers can host product information for business customers. They essentially enable buying and selling to take place between machines. Suppliers can create their own catalogs or have Ariba or Intelysis develop it for them. It's the next step up from the model of aggregating product information into a searchable database. Keeping the database information current is difficult and providing product configuration near-impossible Intelysis says. Moreover, this model also enables suppliers to differentiate their services.

Intelysis, whose new business-to-business service rolls out in June, handles transactions and order processing, or it can leave it up to the supplier. Service suppliers can create and manage their own content and Intelysis delivers them the customers, such as Ford Motors, which has already committed to use an Intelysis service on its extranet for procurement. Intelysis sells real- estate on its service to some 175 suppliers that it has already signed. It says its web technology can also be used by companies to integrate disparate services such as online travel and human resources on to an enterprise portal. It likes to think of itself as an internet on-ramp. It makes money by charging organizations for the procurement software; charging suppliers to create and maintain catalogues (around $25 a month) and transaction services. It insists it doesn't only sit behind firewalls and can connect a company with its suppliers and customers.

Intelysis, funded by Chase Manhattan, expects to grow from 110 employees to 200 by year-end. It expects its new services to reach out horizontally to a wide range of suppliers; it won't be restricted to vertical industries or communities. It will host the likes of Staples and Home Depot alongside Compaq and Dell. Intelysis claims it was the first into the new model and that aggregators such as Ariba Technologies are playing catch-up. Ariba won a ringing endorsement from Hewlett-Packard Co for its Ariba.com extranet, which it's touting as an internet-based supply chain solution. As well as using Ariba, HP is hosting the services.