Volante grips PwC customers after exchange collapse

Volante grips PwC customers after exchange collapse

ASX-listed integrator Volante is determined to hold onto 236 corporate midrange customers after PricewaterhouseCoopers (PwC) pulled the pin on its e-procurement exchange, e.conomy.

Volante was one of 400 suppliers that maintained a direct link from the e.conomy portal to its online catalogue, where e.conomy customers could browse and purchase up to 30,000 IT goods.

PwC has become the latest company to abandon its interest in B2B e-commerce, closing its exchange portal this week.

The portal was launched in August 2000 with promises to members of annual expenditure cuts of up to 20 per cent. The exchange handled a range of goods and services from hotel reservations to telecommunications access.

PwC refused to comment except for a brief statement confirming the discontinuation of the business. "Significant results and substantial value have been achieved for both buyers and suppliers since the e.conomy consortium was launched," said Tony Peake, PricewaterhouseCoopers partner, in the statement. "In contrast, however, the firm's returns from the business have been inadequate. The decision was made following a concerted effort to defray the cost to the firm."

Initial media reports suggested the company sacked as many as 50 staff, but a PwC spokesperson said only 16 were made redundant.

Hugh Bickerstaff, general manager of Volante business unit VIT Online said he is of the understanding PwC will now ensure those of e.conomy's customers that procured IT products through the exchange will be handed over to Volante. "The customers will be looked after as if they were our own," he said.

Bickerstaff said he is also confident some customers now familiar with the Volante catalogue will come to Volante's online store of their own accord.

IDC analyst Brooke Galloway said horizontal exchanges are being challenged more than they were in the past with regards to what measurable value they can provide to partners and customers. She expects the market to squeeze out more players in the tightening economy.

"The business model depends largely upon the volume of transactions," she said. "But the size of the Australian market is simply not big enough to support so many exchanges. So they are fighting to get a share of a limited volume."

Galloway sees the exit of several players as a positive sign for the industry. "The exchanges without the value proposition will disappear, and I'm confident those with measurable value and a well thought out business model will survive."

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