March - 2000 - issue > Cover Feature

It’s bigger than anything else you have seen on the Net yet, and it’s as big as commerce can ever get. Pundits are calling it “the next frontier” and research groups are appearing to vie with one another to put out ever higher estimates on the exploding B2B, or business-to-business, market.
Each time a research group throws up a new estimate on the increasing possibilities in B2B, stocks of companies such as CommerceOne and Ariba race higher. When techno prophets tell the world about how XML, short for extensible markup language, is converging with some other technology to provide the backbone for B2B e-commerce, still some more stocks are pushed higher. Business prophets ponder questions such as how XML will impact existing businesses, how exactly the world of commerce will migrate online, which industries will be the earliest to do so, and all the time stocks rise higher and higher.

Mind you, this is all happening now. Back when B2B was still in the realm of the future, Asim Abdullah made some smart moves, which is why he is sitting pretty in Saratoga with some 1.8 million shares of CommerceOne, worth about $300 million.

E-commerce Evangelist

In 1996, Karachi-born Abdullah was working at Taligent, an alliance between Apple, Hewlett-Packard and IBM that was later abandoned. Sensing the hopelessness of it all, Abdullah hopped on to the nonprofit bandwagon of CommerceNet, an organization funded by the US government’s Department of Commerce to help societies transition to e-commerce.

Although Abdullah is a trained engineer — he holds bachelor’s degrees in computer science and electrical engineering — he came aboard CommerceNet to use his managerial talent. As executive director, Abdullah’s brief was to sell the concept of e-commerce abroad and prepare the world to embrace e-commerce when it became a reality.

Abdullah imbibed a lot of e-commerce passion from his association with Jay Tenenbaum, a technological visionary whose company was the first to conduct electronic transactions and auctions on the Web. “I started thinking about B2B commerce with Jay,” Abdullah said. The team grew more aware of the technological underpinnings necessary to make that happen, Abdullah explained. And, as they realized the sheer scale of the technology required, they also woke up to the sheer scale of the potential business.

Creating Technology that Talks

The following year Abdullah joined Tenenbaum in a new venture. Veo Systems was a spin-off from CommerceNet with $2 million in funding from the National Institute of Science and Technology, which is run by the Department of Commerce. Veo would attempt to develop further XML-based technology, the only way that diverse information systems could be tied together to conduct B2B e-commerce.

“The fundamental change from B2C (business-to-consumer e-commerce) [to B2B] is that it is no longer a browser-to-Web site interface, but an interface between one information system and another,” explained Abdullah. An intermediate layer of technology is therefore required, one that can facilitate diverse information systems to “speak” to one another. Veo Systems, with Abdullah as the CEO, set out to create that technology.

In addition to the initial funding from the National Institute of Science and Technology, the company received $2 million from the NIST and another $3 million from private sources.

According to Abdullah, Veo’s biggest challenge was in crafting XML, a programming language that emerged from a publishing background, into a useful tool for software engineering. With that vision in mind, Veo made some smart market moves and assembled a team of 35 professionals from different parts of the world. It hired proficient XML programmers from faraway lands including Russia; and two other sets of programming talent – those in distributed objects from, notably, Sun Microsystems, and those that were already crafting e-commerce software.

The coming together of this team set the stage for some “core engineering work” that in two years developed what Abdullah says one can think of as a “giant switch” that provides connectivity across all business information systems. It is this switch that is key to a lot of B2B e-commerce; it was also the focal point that created the merger of Veo with CommerceOne, a company that had built a number of B2B e-commerce applications.

In January 1999, Veo Systems merged with CommerceOne, itself at an advanced stage of business development and, like Veo, close to an initial public offering. Although Veo had developed a great product, it was still about “six months away” from placing a product on the market. “We could have done it on our own,” said Abdullah, “but it would have taken longer and time to market was critical. We couldn’t go through a normal cycle of development.” “

Veo brought to the table core technology which is scalable to any order,” said Abdullah. This, together with CommerceOne’s “tremendous domain expertise in B2B e-commerce, strong resources and good management,” made it a great product that was received well at the market.

According to Abdullah’s estimation, a few major players such as CommerceOne, Ariba, Oracle, IBM and SAP are going to corner B2B e-commerce, projected to be worth as much $7 trillion by 2005, because it requires huge infrastructure to set up electronic marketplaces of the kind needed to efficiently handle B2B e-commerce.

Established players are also making a break for more dramatic play in the B2B space. Leading among them is i2Technologies, a maker of supply chain management software. In recent months, Sanjiv Sidhu’s company has made rapid advances into B2B e-commerce, keeping in mind the fact businesses are being transformed by the electronic marketplaces. Among the major deals i2 has struck is the one for General Motors. It and CommerceOne are jointly setting up the marketplace for the mammoth automaker.