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Bristol-Myers taps Ariba for Net exchange

The software maker will build a private marketplace that will allow the pharmaceutical giant's partners and suppliers to buy and sell materials and services online.

    Business-to-business software maker Ariba on Tuesday said it signed a deal with Bristol-Myers Squibb to build a private exchange that would allow the pharmaceutical giant's partners and suppliers to buy and sell materials and services online.

    The Ariba-powered Private Sourcing Exchange will automate Bristol-Myers' purchases of direct and indirect materials, business services, and capital equipment, Ariba said in a statement.

    Bristol-Myers will join a growing number of companies that are creating their own online exchanges to automate their business purchasing process rather than building or joining a public marketplace used by others outside of their business partner networks.

    According to a recent survey by AMR Research, the private exchange market is expected to steal the business-to-business show dominated by consortium players in 2000 by surpassing the public exchange markets and becoming the cornerstone of the $5.7 trillion in commerce transacted over the Internet.

    "This is another indicator that Ariba is moving away from the consortium public e-marketplace, which is showing signs of slowdown, and focusing on the brick-and-mortar opportunities of the private exchange market," said Laurie Orlove, an analyst at Forrester Research.

    Bristol-Myers said in a statement it hopes to implement similar Ariba-built sourcing exchanges for its European and Latin American markets later this year.

    Ariba competes with i2 Technologies and Commerce One in the business-to-business software market.