REDMOND, Wash., Nov. 6, 2000 — Every week, MarkMaster, Inc., turns away potential business. It’s not that the nametag and rubber stamp maker doesn’t want the work. The company simply can’t afford the cost of setting up the online connections necessary to link to the growing number of electronic marketplaces and associated buyers that routinely come calling.
“We are a manufacturing company, not an Internet company,”
said Vice President Kevin Govin.
“I don’t have the resources. I can’t afford to take more financial risk.”
But MarkMaster believes it has found a solution to its dilemma in Microsoft’s E-Business Acceleration initiative. This comprehensive offering aims to make it easier and less expensive for businesses of any size to market their goods though online exchanges, or e-marketplaces, which facilitate electronic commerce by connecting buyers to suppliers online. It also allows suppliers to connect directly to e-procurement systems or to offer online storefronts for many customers.
E-Business Acceleration, which Microsoft launched today, provides one-stop access to the four largest e-marketplace vendors – Ariba, Commerce One, Clarus Corp. and VerticalNet. By eliminating the expense and hassle of navigating the different technology standards used by different vendors, Microsoft expects businesses will be able to more easily connect with current buyers, attract new customers and realize greater profits.
The initiative also creates a range of service options that allow any business – from the small office to enterprise-scale businesses – to sell through e-marketplaces. For small businesses, Microsoft’s bCentral business portal offers a new monthly subscription service that provides access to e-marketplaces without the usual hardware and software investment. Larger businesses can take advantage of a tool kit that allows them to connect to multiple marketplaces. In addition, there are expanded services through a variety of Microsoft’s partner application service providers (ASPs), integrated software and hardware from Compaq Corp. and Dell Corp. for medium-sized businesses, and specialized consulting services to integrate larger software packages into the computer systems of enterprise-scale businesses.
“Microsoft is providing the first comprehensive, business-to-business commerce strategy that empowers businesses of any size or complexity to extend their sales onto the Internet through e-marketplaces,”
said Bill Dunlap, Microsoft group product manager for E-Business products.
Tapping Into the E-commerce Boom
Online procurement via e-marketplaces is a dream come true for many product suppliers and buyers. E-marketplaces bring together suppliers pre-approved by each buyer’s purchasing department, ensuring employees don’t buy the wrong item and trimming the cost and time it takes to process orders. The convenience is comparable to shopping for personal goods in a mall where the stores stock only clothes in your size and home furnishings in your family’s preferred colors – and everything is priced to fit your budget.
“These marketplaces have optimized the whole supply chain,”
“Before it was a very manual process. When you set preapproval criteria and start flowing orders electronically, orders get arranged faster. You remove the bottlenecks and, as a result, reduce the cost.”
High-technology analyst firm Jupiter Communications expects business-to-business e-commerce to expand from its present annual volume of $336 million to $6.3 trillion in 2005. Analysts also predict e-marketplaces will handle as much as half of this commerce.
Hurdles still remain in the path of this seemingly unstoppable trend. One of the biggest: Businesses that want to sell products through exchanges have had to connect separately to each of the different e-marketplace venders. The cost is high — running well into tens of thousands of dollars — and resource intensive to maintain these separate connections.
Although MarkMaster is one of the nation’s largest makers of nametags, rubber stamps and related items, the profit margin on these products is too slim for the company to invest significant money connecting to multiple e-marketplaces.
“When we must create new e-commerce links, we have to look at what it is going to cost and whether it’s worth it,”
“An amount as small as 3 cents per order in our business environment can be very costly. We even have to look at what it costs to print the invoice.”
Until now, it has only been cost effective for MarkMaster to connect to e-marketplaces used by a few banks and other large customers, forcing the company to turn away the weekly requests from other e-marketplaces and potential customers who want to do business online.
E-Business Acceleration eliminates the cost and hassles of connecting to more than one e-marketplace vendor by making it possible to access the four largest vendors using one software connection.
MarkMaster expects that easier access to e-marketplaces will enable it to take on as much as 50 percent more business.
“With e-Business Acceleration, I can reuse technology I already have and not spend so much time creating new connections,”
“Because of that, I can afford to work with smaller companies.”
Supplier Accelerator, a key part of the E-Business Acceleration initiative, solves the problem of connecting to multiple e-marketplaces. Supplier Accelerator provides an intelligent abstraction for managing catalog publishing and order processing across the leading e-marketplaces and directly with buyer applications, and is extensible to accommodate additional e-business sales channels. Supplier Accelerator is built on top of Commerce Server 2000, BizTalk Server 2000, and SQL Server 2000, providing a powerful foundation for e-commerce.
“By providing connectivity for all major e-marketplaces from one integrated system, Supplier Accelerator allows suppliers of any size to reach more buyers than ever before,”
Wachovia Corp., a leading interstate financial services company, has built its new e-marketplace around the conveniences offered by E-Business Acceleration and Supplier Accelerator. Its new WorkWares trading hub will offer online catalogues for suppliers of maintenance, repair and operations goods and services for corporate customers.
The functionality offered by E-Business Acceleration will allow WorkWares to easily add suppliers’ catalogues in a fraction of the time it now takes e-marketplaces, said Joanna Giacobbe, WorkWares manager.
“Every e-marketplace has its own standard for catalogues,”
“The middleware Microsoft provides will enable us to have a uniform methodology for adding suppliers and connecting to multiple marketplaces.”
As a result, Giacobbe expects that connecting suppliers and receiving their catalogues in a format that WorkWare’s online engine can understand – a process that can take e-marketplaces up to 100 days – will require no more than 10 days.
“The bottom line,”
Microsoft’s Dunlap said,
“is we don’t put constraints on how and where businesses connect to e-marketplaces. Any product supplier can now connect with buyers via virtually any e-marketplace.”
Business Software Extends Online Resources
Once connected to e-marketplace vendors, suppliers need to manage their online operations as efficiently as their other business transactions. E-Business Acceleration is designed to accomplish that by extending the combined resources of Microsoft’s newest enterprise servers to e-marketplaces, Dunlap said.
Through Commerce Server 2000, Supplier Accelerator allows businesses to expose their catalogues on e-marketplaces, as well as take orders and process them. It also provides instant analysis of sales data so business managers can immediately understand what sales channels are performing well. Using BizTalk Server 2000 and XML to integrate and orchestrate orders throughout a supplier’s operation, Supplier Accelerator ensures each part of a business and its supply chain receives proper notification on all orders. Supplier Accelerator uses SQL Server 2000 to help suppliers find ways to better serve their e-business customers by stockpiling data exchanged during the transactions and sniffing out trends within these purchases.
“Earlier versions of this software are what makes my business run,”
said MarkMaster’s Govin. Extending these expanded capabilities to his e-business will make it even easier to increase the amount of e-business the company takes on in the coming years, he said.
As E-Business Acceleration helps MarkMaster and other businesses grow, so will the services the initiative provides to help them serve additional customers and set their sights even higher.
According to Dunlap, there’s a myth about e-commerce: that e-marketplaces set up by large corporations and manufacturers only offer catalogues for large parts or equipment suppliers. But these e-marketplaces also serve smaller suppliers, such as those that supply flowers, gift baskets and janitorial services, Dunlap explained.
“No matter what size of business – from the home office to the enterprise – E-Business Acceleration provides the products, programs and partnerships for suppliers to sell to their buyers wherever they are,”
“As a business grows, E-Business Acceleration can provide more scalable and customizable offerings that better meet its needs.”
For small businesses that haven’t yet hired an information technology staff, E-Business Acceleration allows them to put their sales catalogues online in less than 24 hours without any investment in additional hardware or software. These businesses pay a monthly subscription fee to Microsoft’s bCentral business portal, which translates and exposes their catalogues to e-marketplaces. bCentral also routes orders back to the business and provides sales analysis capabilities.
Larger businesses that have greater needs but still prefer not to make a big IT investment can receive hosted service through an ASP arranged by Microsoft. This hosted option allows businesses to take more orders and receive customized services such as special order processing and integration with other computer systems.
The next step on the service and convenience ladder allows medium-sized companies with IT staffs to work with consultants from Dell and Compaq to integrate and customize hardware and software. This option gets a business’ sales catalogue online in less than 30 days, Dunlap said.
Large, enterprise-scale businesses with complex technology systems can work with a network of Microsoft partners, including Andersen Consulting, KPMG and Compaq, to integrate necessary software and create connections to e-marketplaces.
The scalability of E-Business Acceleration’s services is all-important to businesses such as MarkMaster, where technology is just another operational expense.
“If I can take an expense I had this year and expand it next year without losing that initial investment, there’s more payback for my business,”
WorkWares’ Giacobbe said E-Business Acceleration is a prime example of how Microsoft is making it easier for businesses to reap the full benefits of e-commerce.
“We think that Microsoft excels in providing complete e-commerce solutions that enable both market makers such as WorkWares and the buyers and suppliers who use electronic marketplaces,”
Microsoft’s leadership in e-commerce is a result of the company’s breadth of vision and insistence that all suppliers should be enabled to sell electronically, Dunlap said.
“Microsoft has cultivated a set of technologies that allow any size company to benefit from the booming e-commerce revolution,”
We also understand that companies need more than to expose their catalogues on e-marketplaces. They need to flow sales through their supply chain and then refine strategy based on trends within these sales.
“We are unique,”
“in understanding the needs of any size supplier and defining a comprehensive strategy to make them all successful.”