Next Up: Business-to-Business Sites
Two sets of industry giants, helping to pull corporate America onto the Net, announced plans Wednesday to create business-to-business Web sites that promise to change the way companies shop.
Engineering and construction giant Fluor Corp. in Irvine and IBM Corp. in Armonk, N.Y., agreed to build a global online market for fast-growing industries such as telecommunications, pharmaceuticals and oil and gas.
In addition, Chevron Corp., Oracle Corp. and Wal-Mart Stores Inc.’s McLane Co. unit said they will form an online supply exchange for the convenience store industry.
The Fluor-IBM online exchange would be a central marketplace for retailers and companies looking for goods and services at a lower cost than corporate buyers could get through conventional methods, officials said.
Financial details of the venture, which is expected to launch by summer, were not disclosed.
Fluor, known primarily as a global engineering and construction company, has reorganized in recent years and extended its business into such areas as telecommunications, operations and maintenance, temporary staffing and equipment rental.
IBM says it is a world leader in electronic procurement, obtaining $13 billion in goods and services on the Web last year. The effort to Web-enable the company’s procurement systems, which began in 1994, has resulted in overall savings of $6.5 billion, the company said.
McLane will form an independent company with Chevron and Oracle to automate and centralize convenience store purchases online. McLane supplies more than 30,000 convenience stores in the U.S., Brazil and Taiwan.
RetailersMarketXchange.com, as the exchange is dubbed, is designed to cut costs for retailers and independent stores that together spend more than $200 billion on supplies a year, the companies said.
Chevron Chief Executive Dave O’Reilly said the exchange will be the first to serve the global convenience and small-store retail market. “The big benefit here is to leverage the Internet to create an efficient purchasing and communications exchange,” he said.
Oracle in Redwood City could earn millions of dollars in fees from maintaining online exchanges and collecting fees from each transaction, analysts said.
Chevron in San Francisco now sells goods through about 8,100 retail outlets nationwide, making it the sixth-largest convenience store chain, according to National Petroleum News, an industry journal. The company accounts for about 5% of the convenience store market, O’Reilly said.
The exchange will try to attract other convenience store chains and suppliers and will offer companies that join an ownership stake in the exchange, the companies said.
This exchange is the third that Oracle Corp., the world’s largest database software maker, has helped build. Last month Ford Motor Co., General Motors Co. and DaimlerChrysler AG agreed to combine their online purchasing in a centralized auction site run with software from Oracle and Commerce One Inc.
