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Ariba in deal to create B2B health care marketplace

The business e-commerce software maker says it will partner with Neoforma.com to create an online marketplace aimed at the health care and medical equipment industry.

Business e-commerce software maker Ariba today said it will partner with Neoforma.com to create an online marketplace aimed at the health care and medical equipment industry.

Neoforma.com, which already operates an e-commerce site for the medical equipment and health products industry, said it will integrate Ariba's business-to-business procurement software into its own system in order connect a massive number of buyers and sellers over the Internet.

Financial terms of the deal were not disclosed.

Ariba and rivals Commerce One, Oracle, SAP and a slew of others have been racing to create large online marketplaces focusing on a number of specific industries, hoping to help companies cut internal supply-chain and purchasing costs by moving that process to the Internet. Ariba and its competitors develop the software to power these online marketplaces, or trading exchanges that link companies with their suppliers, partners and buyers via the Web.

The market for business-to-business e-commerce is expected to explode in the coming years, a dangling carrot for a wide range of technology providers in recent months. Leading research firms have projected the market to reach between $2.7 trillion and $7.3 trillion by 2004, from about $131 billion last year.

Today's deal is the latest in a string of marketplace deals that have popped up in the recent business-to-business boom.

Last week, Ariba added food to its growing menu of marketplaces after announcing a partnership with agricultural conglomerate Cargill. The two companies plan to build Novopoint.com, an online marketplace that will link food and beverage manufacturers to their suppliers and partners over the Internet. It plans to launch the site this summer.

Santa Clara, Calif.-based Neoforma, which partnered with SAP last November in a similar deal, said that relationship is still intact and does not overlap with today's pact. The company said it is continuing to work with the German software giant to build an online health care marketplace that targets an audience of medical suppliers and buyers operating on SAP software.

Neoforma said Ariba's software will be combined with existing features such as order management and fulfillment, and medical product catalogs. The Ariba product will help the company deliver a customized marketplace to trading partners within the health care industry according to the industry's specific needs, Neoforma said in a statement.