Companies Unveil E-Mall

Fairfax, Va.-based American Management Systems Inc. and Mountain View, Calif.-based Ariba Inc. last month announced the launch of Buysense.com, the first World Wide Web-based marketplace designed to streamline the procurement process for state and local governments.

Buysense.com is powered by the Ariba Network platform and the Ariba ORMX application, which represents the first standards-based, extranet electronic commerce solution designed specifically for state and local governments. Authorized government buyers can connect to the site using Ariba's hosted application, search online supplier catalogs and place orders.

The service can be installed in 30 to 120 days and is expected to generate about $50 million over the next three years, said Bill Kilmartin, AMS' vice president.

"One to four months is very quick for a large, complex application that usually takes a year or year and a half," Kilmartin said, adding that Buysense.com also will ease cooperation among government buyers. "We're offering a scalable, multijurisdictional [application] that allows state and local governments to cooperate with each other. It allows cooperative buying across boundaries."

Paul Melchiorre, vice president of operations for the Americas at Ariba, said the partnership with AMS was "a long time in coming" because the skill set that AMS brings complements the technology at Ariba. He echoed Kilmartin's ambitious revenue predictions.

"We expect a recurring revenue stream because this is not a traditional buy and sell but a subscription-based orientation."

Kilmartin said he is negotiating with "literally dozens" of states interested in becoming "early adopters," which will help with the initial launch and with customizing the solution. Governments will pay for the service as they use it and be charged a flat fee per user, per year based on the size of their systems and their technical and business readiness, in addition to a nominal transaction fee. AMS, which specializes in public-sector systems integration, is working with its existing customers to move them to the new system, and it expects its first customers to be using Buysense.com in early 2000.

Buysense.com represents an exclusive agreement between AMS and Ariba for the state and local market, but nonexclusive terms of the agreement make AMS an authorized reseller of licenses for Ariba applications to the federal defense and civilian markets, Kilmartin said.

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