ASPs eye e-exchanges

ASPs eye e-exchanges

Hosted supply-chain solutions are giving business-to-business (B2B) trading exchanges a new challenge by offering suppliers an environment that, for the moment, may have more appeal than the buyer-meets-seller services of exchanges, according to analysts and vendors.

Recent events have underscored the often industry-specific and compelling role that hosted supply-chain application service providers (ASPs) could play.

Late last month, Bidcom and Cephren merged to create Citadon, a US-based ASP of collaboration and commerce services for the buyers and sellers who join forces on construction projects.

In a similar vein, Aqueduct, formerly BuyNow, which provides outsourced e-commerce services for retail hardware, software and consumer electronics manufacturers, announced last week that it has completed a second round of venture capital funding. Aqueduct aims to streamline the distribution and communication channels between retail suppliers and its customers using a platform with modules for online store planning, design and management; a hosting infrastructure; order processing; payment processing; and risk management, among other services.

In response to changing conditions, Commerx, after the resignation of its co-founders and the naming of an interim CEO late last month, has solidified its new role as an ASP that offers an integrated suite of online e-procurement and collaborative supply-chain applications.

The company is no longer a creator of public e-market places, Commerx officials said in a prepared statement. The company withdrew its IPO and cut staff in response to Wall Street's shrinking support of B2B Band-related e-commerce efforts, officials added. The Commerx PlasticsNet market place that it fostered will become an information site, said a spokeswoman for the US-based company.

Established players such as i2 Technologies and Manugistics have also begun to offer hosted options.

The backers of these hosted supply-chain options see themselves as providing suppliers with strong branding and B2B relationships - two major advantages over what they see as the flawed and limited meet-and-transact services of exchanges.

"The exchanges are kind of the antithesis of what we're really building our business on," said Corey Hutchison, CEO of Aqueduct. "[But] the exchanges certainly have to be something that we offer our customers a chance to hook into." Those extensions, however, will not be a major driver for Aqueduct. "I look at exchanges the way I look at e-tailers, as just one additional channel that customers might want to be involved in," Hutchison said.

Some hosted supply-chain pro-viders such as Citadon also tout their abilities to provide complicated design, collaboration and procurement services in addition to complex workflow management in a secure environment. Robert Majteles, chairman of Citadon, said these value-added extras also take the waste out of engineering, procurement and construction industry processes.

The hosted supply chain is "a competitive challenge" to the trading exchange option, said Randy Covill, an analyst at AMR Research. "The pressure is really on trading exchanges to do things that go beyond the Golden Rolodex," Covill said.

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