The two companies formed a joint venture today called Actra Business Systems in an effort to make Net-based business-to-business transactions commonplace. The new company will focus on developing and marketing software applications to let businesses make orders and payments, trade catalog information, and exchange purchasing and supply forms via corporate intranets and the Internet.
The focus of the new Mountain View, California-based company is distinct from more general electronic commerce ventures, most of which concentrate on ways to sell products directly to consumers online. Actra's products will facilitate backstage business transactions, such as a purchases of office supplies or specialized equipment.
To make this possible, Actra will promote the use of a technology called EDI (electronic document interchange), which lets businesses electronically exchange the forms they use, such as purchase orders or invoices. Instead of mailing a purchasing order, for example, a business could send it via the Net embedded with the information to be dumped directly into corporate accounting or other business software. RJR Nabisco estimates that processing a single paper-based purchase order costs the company $70. Processing the same order using EDI reduces the cost to 93 cents.
EDI technology is already widely used, but mostly over private networks. Moving EDI to the Internet will lower costs and increase accuracy when conducting business transactions, according to Netscape officials.
The approximately 100,000 companies that use EDI systems represent only 5 percent of businesses that could potentially benefit from the technology, according to market research firm Forrester Research. Most companies neglect to use EDI because of the complexity and high cost of setting up the system.
The Actra products are scheduled to be available during the first half of next year and will be distributed through electronic commerce service providers, as well as GEIS and Netscape. The companies have not yet disclosed pricing or other details, except to say that all Actra products will use the Secure Sockets Layer encryption protocol and will incorporate other security standards as they become available.
GE and Netscape each have a 50 percent stake in the new company. Jim Sha, senior vice president of new ventures at Netscape, will serve as the acting Actra CEO.