The Cutting Edge: Computing / Technology / Innovation : CommerceNet Creates the Cyber Marketplace
CommerceNet hit Silicon Valley in April like an on-line QVC for technoids--featuring the latest in workstations and hard drives rather than electroplated jewelry or ceramic collectibles.
Billed as the first large-scale trial of electronic commerce on the Internet, this on-line bazaar enables business customers to shop for computers, software and other electronic gear.
It has the backing of some of the biggest names in computer technology--including Hewlett-Packard, Intel, Sun Microsystems and Apple Computer, which hope eventually to find a cost-effective market for their products and services.
CommerceNet’s chief partners are Enterprise Integration Technologies Corp., a Palo Alto consulting company that helps companies do business on the global network; BarrNet (Bay Area Regional Research Network), a Northern California Internet service provider, and the Stanford University Center for Information Technology.
Cathy J. Medich, an engineer and marketing whiz, came on board as executive director in March. At an Internet conference in San Jose recently, she talked about the promise of CommerceNet.
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Q What is CommerceNet?
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A CommerceNet is a consortium. There are two sides of it. One is that we have an on-line Internet server that is a directory that helps people find products. The other side is that we are a working consortium looking at tackling the business and technical issues of doing business on the Internet. There are some things that need to be done technically to make the Internet a place that’s appropriate for business.
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Q How close are business customers to being able to buy through CommerceNet?
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A Once the buyer finds the seller, you’re not in CommerceNet anymore. You come to CommerceNet to find the resource and then you’re actually directly dealing with the end supplier. People are really just starting with what they’re offering on the Internet. It turns out that it’s a decent-size project to figure out what you want to offer there, how you want to present yourself, how you’re going to maintain the data. Companies may have print material that is not organized in searchable databases. So they have to get that sorted out. That’s sort of a long-winded answer to say that people aren’t quite ready yet to do a lot of on-line transactions. But they are ready to have customers come and find out what’s available and respond with e-mail or phone to the information.
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Q How many businesses are promoting their products through CommerceNet?
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A We have 43 organizations working with us. About 30 have (computer) servers up and running. They include H-P, Intel, several divisions of IBM, National Semiconductor, Tandem, Digital, Amdahl, Apple. It’s very much focused on the computer industry, since they tend to be the people who are connected to the Internet.
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Q But you expect to branch out?
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A We’re looking to see how we can get smaller businesses involved. Our sponsorship membership is $35,000 a year. Those are consortium members that take part in the working groups to define standards. It became clear right after the launch that there was a tremendous interest by small and medium-sized companies in participating not necessarily in the consortium but at least in getting the training and getting involved in the Internet. So we’ve created a subscriber level of $1,250 a year. It provides a place in the CommerceNet directory and training on how to get up and running.
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Q Bank of America is somehow involved?
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A Yes, BofA, Citicorp, Wells Fargo and First Interstate are all participating. They do a lot of electronic payment and credit now, but not on the Internet. They’re interested in working with CommerceNet and other members to define how you would do payments on the Internet. We’re trying not to sit around for two years defining things. We’re trying to define problems and try things in a very fast start mode rather than talk about them too long. Our members are moving quickly, saying, “Let’s try this and come back and report what worked and what didn’t work.” Make the fixes, deploy the technology, get other people to use it and through that set up de facto standards for doing business on the Internet.
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Q Who had the idea?
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A Marty Tenenbaum, the chairman of Enterprise Integration Technologies, proposed it and collaborated with BarrNet and Stanford. They proposed it to the federal government to get technology reinvestment project funding. We also had the backing of the state of California and Smart Valley, a Silicon Valley-based venture to look at improving the area’s competitiveness. CommerceNet was one of 55 projects that was approved out of almost 3,000 proposed. We have $6 million from the government over three years that we are required to match with industry contributions.
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Q Security is obviously a big issue on the Internet.
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A The area we’re focusing on is transaction security. For that, EIT has developed a secure client-server technology that runs on the seller’s computer and Mosaic (an easy-to-use Internet access program), which runs basically on any computer, so that it will allow secure transactions between the two. Both sellers and buyers can get “digital certificates” that attest that they are who they are. The technology will get submitted to the Internet standards body, and we hope it will become the standard way of doing secure transactions.
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Q What do you see as the biggest problem facing CommerceNet?
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A Right now it’s the number of opportunities. There are so many ideas of what we could do and so much pent-up demand. One of our biggest challenges is to pick the ones we want to focus on and not get too diverted.
Q&A; Cathy J. Medich
Title: Executive director of CommerceNet
Age: 39
Education: BS and MS in electrical engineering, MIT; MBA, Wharton School, University of Pennsylvania
Home Computers: A Macintosh II, with color printer ad CD-ROM drive; plans to buy a PowerBook
Experience: Engineering and marketing at Hewlett-Packard, General Electric, Teradyne and other companies.
