IBM Pursues "e-Business on Demand"

Inks deal with i2 to offer hosted e-procurement on "pay-as-you-go" basis

Las Vegas  May 15, 2002  IBM this week took the first step towards its vision of "e-business on demand" by signing a deal with supply chain solution provider i2 Technologies to extend their current alliance to sell a network-based, hosted e-procurement solution.

Established as a "pay-as-you-use" business model, the partners said this hosted procurement service, developed jointly by IBM and i2, would reduce the initial investment in software licenses, implementations and hardware necessary to conduct e-business. However, the two solution providers did not announce exactly how much companies would have to pay as they go, that is, the pricing for the new offering.

IBM's "e-business on demand" vision calls for shared infrastructure and application capabilities to be utilized and priced as utilities. Through the hosted solution, the two partners will offer e-procurement as a network-based service that allows companies to conduct business with established e-procurement suppliers operating within their own supply ecosystem.

The IBM-i2 offering, announced at i2's user conference in Las Vegas this week, combines sourcing, hosting and implementation services, including i2's supplier relationship management software (Procurement and Negotiate) and content solutions, along with IBM's network-based services.

"The IBM and i2 hosted e-procurement solution can provide value to enterprises without the expense inherent in setting up a new application infrastructure," said Bill Schaefer, IBM vice president of procurement services. "The IBM and i2 solution is designed to reduce the costs of goods purchased, reduce administration costs for both procurement and information systems management and improve supplier performance."

Dave Horne, i2 executive vice president, said: "IBM's expertise providing hosted services can enable customers to strategically outsource procurement for non-core business goods and services. That frees skilled purchasers to focus on critical core materials and services, which can allow them to maximize the value derived from procurement operations across all categories of spend."