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Net-based commerce on the rise

Transactions via secure networks with suppliers will grow, but more orders will pour in from Web-enabled systems, an executive says.

SAN FRANCISCO--Traditional online commerce conducted on secure private networks with suppliers will continue to grow in the Internet era, but more orders from customers will pour in from Web-enabled systems, according to the chief executive of Sterling Commerce.

Chief executive Warner Blow said low-cost Internet technologies and the public network form a nice complement to electronic data interchange (EDI) transactions over secure networks called value-added networks (VANs). EDI involves forms-based transactions sent directly from computer to computer without human intervention.

"For some time in the future, you will continue to see large corporations and large hubs build their back offices using EDI techniques," Blow told an e-commerce conference put on by Giga Information Group. "EDI transactions have not slowed down."

Internet bookseller Amazon.com, for example, uses Sterling Commerce software on its back end to communicate with publishers and other suppliers, Blow said. Sterling Commerce runs a major VAN and markets some 100 different kinds of e-commerce and communications software.

"The advent of the Internet has provided a whole new world for us," Blow added. "EDI never dealt with procurement--it dealt with the supply side."

In a program devoted largely to online procurement, Blow and other vendors stressed that there is no single right way to do procurement. "Address the business problems first, then apply the technology," Blow said.

"Although the Internet is revolutionary, moving to it is evolutionary," he added. "How customers integrate it is evolutionary."

Tony Trenkle, director of e-commerce at the U.S. General Services Agency, the largest buying organization in the world, agreed: "The technology is easier, the people are harder [to change]."

Trenkle emphasized the federal government's efforts to work with the private sector on procurement.

"We want to use what the commercial world is using. We don't want to push proprietary standards," he said, adding that in the past the government has required separate protocols. He emphasized the GSA's work with private standards consortia such as CommerceNet and RosettaNet.

Blow said Sterling's approach to the Internet commerce market has been to Internet-enable all of its 100-plus software products and services, leaving it to customers to decide which technologies to use.

"E-commerce will continue to use multiple technologies," he added. "E-commerce addresses the total value chain, not just search-and-select but fulfillment, replenishment, and payment."