Sybase founder touts extranets as the key to electronic commerce

By Sandra Gittlen
Network World Fusion, 3/24/98

Hoffman pic Network World Fusion, 3/24/98

Boston - "EDI is a dead man walking."

So proclaimed Mark Hoffman, president and CEO of Commerce One, Inc., today here at his afternoon Internet Commerce Expo (ICE) keynote.

"EDI doesn't provide for real-time interactive transactions between buyers and sellers," Hoffman said. Electronic data interchange is expensive to implement, has a high transaction cost and has not been widely adopted, he said. "There has been a less than 10% acceptance rate of EDI in the business world."

Hoffman, who jumped on the client/server bandwagon when he founded Sybase, Inc., is now touting the benefits of electronic commerce. "We have the bandwidth and security in place to go forward with electronic commerce," he said.

But like this morning's keynote speaker, Lotus Development Corp. CEO Jeff Papows, Hoffman said the true growth in this market will be driven by business-to-business transactions, not business-to-consumer.

Hoffman said transactions need to change from today's system of many buyers talking to many suppliers to a structure of many buyers to one integrator to many suppliers. Commerce One, which introduced its first products last year, hopes to be that middleman.

"Currently, every buyer is dealing with every supplier," Hoffman said. "That's terribly inefficient."

Instead, he said a "catalog of catalogs," or integrated extranet, is needed so the buyer can do comparison shopping online. In addition, suppliers can offer customers value-add online services such as package-tracking.

Another benefit to electronic commerce is that suppliers can change prices daily or hourly, something that is not possible with EDI. "Suppliers could react to changes in the market they detect on an immediate basis," Hoffman said.

A crucial part of this new structure is a tie-in to both the buyer and seller ERP systems. He said too much time is being wasted reinputting data for purchases.