Arrow builds e-business hub: Viacore creates Arrow Connects! with BusinessTone connectivity tool - Distribution

Electronic News, Sept 23, 2002 by Rob Spiegel

While Arrow Electronics Inc. has long provided e-business connectivity to its suppliers and customers through EDI, browser-based connections and RosettaNet PIPs, the company last week announced a leap forward in building an e-business hub using the services of Irvine, Calif-based Viacore Inc.

Dubbed Arrow Connects!, the hub will be a large-scale machine-to-machine communications network that uses the just-released Viacore tool, BusinessTone. The first phase of the hub will focus on connecting the Melville, N.Y.-based distributor's suppliers via RosettaNet standards, but the network will not be restricted to suppliers or RosettaNet standards.

Arrow chose RosettaNet as its first phase in moving the network forward. "Our motivation is to move as quickly and deeply as we can in getting RosettaNet adoption among our trading partners," said Paul Katz, VP of digital supply chain solutions at Arrow. Katz noted that Arrow Connects! would accommodate connectivity other than RosettaNet PIPs, but initially there will be a RosettaNet preference.

"We're beginning to see the real-time benefits of RosettaNet, but the technical capability to go beyond RosettaNet certainly exists," Katz said.

Arrow chose Viacore as the vendor on the project for a number of reasons, including the company's close association with RosettaNet. Viacore CEO Fadi Chehade was instrumental in launching the RosettaNet consortium before he left to start Viacore. Viacore also has a formidable e-business track record, having built major hubs for electronics companies including Cisco Systems, Hewlett-Packard as well as HP's recent acquisition, Compaq.

"We can take advantage of the fact that they have the real-world experience," Katz said. "We have hundreds of EDI connections, but in terms of RosettaNet connections, they have the experience."

Arrow was also attracted by Viacore's utility-like pricing structure that allows Arrow to pay by usage for much of the network's cost. "The pricing model will allow us to carry out the connectivity activity, the enablement, at a lower cost," Katz said. The usage pricing structure also reduces Arrow's risk because the ultimate usage of the network is unknown. "We're not quite sure of the rate of adoption, so the usage rates are attractive."

Arrow Connects! is new in its scope, but Arrow has long been involved in developing its e-business connectivity. "Arrow is at the forefront of deep integration," Chehade said. "This step underscores their commitment to RosettaNet and efficient B2B with trading partners."

In conjunction with the announcement of Arrow Connects!, Viacore has rolled out its connectivity program, called BusinessTone, as a community integration service designed to make machine-to-machine connectivity easier and less expensive. The package brings together the infrastructure Viacore developed while building hubs for Cisco HP and Compaq.

"BusinessTone is everything we've done over time," Chehade said. "Now it's presented in a set of services that offer a turnkey service."

As for the usage-pricing model, Chehade explained that the concept developed gradually over previous projects.

"In the past, we introduced the usage model to our clients in bits and pieces," Chehade said. "Moving forward, this is the model we're sticking to, subject to the needs of the community builder."

Analysts have so far praised the ease of Viacore's BusinessTone "It's almost as easy as picking up the phone. This makes it almost like a dial tone," said Dan Garretson, senior analyst at Cambridge, Mass.-based Forrester Research Inc. "What it's really doing is taking the RosettaNet standards and integrating them in an automated system so the partners don't have to figure out how to communicate."

Garretson explained that Viacore is further ahead than most vendors, partly because of its work in the high-tech industry, which has a sophisticated standards body in RosettaNet that other industries lack. "Viacore is already playing a significant role. HP is implementing it. Cisco has it in their hub," Garretson said. He noted that Viacore is one of the few remaining vendors that provides a network rather than sells applications.

Vinay Asgekar, research director at Boston-based AMR Research Inc., also acknowledged Viacore's role as one of the remaining viable e-business vendors in the electronics industry.

"I think an opportunity was created for them with the demise of eConnections. Now they have a better chance of survival," Asgekar said.