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Small B2B-software maker's ship comes in

Beating out software giants Ariba and Commerce One, little known Idapta is chosen to build a new marketplace for the ocean shipping industry.

    Beating out business-to-business e-commerce software giants Ariba and Commerce One, little-known software maker Idapta has been chosen to build a new marketplace by a group of major ocean shipping companies.

    The marketplace, called LevelSeas.com, will use the Atlanta-based software company's MarketExchange and Commerce OP products to provide Web-based freight-management tools and services. The products will also be used to manage wet and dry commodity shipping processes, including voyage cost calculations and port service arrangements.

    Targeting the $100 billion ocean freight industry, London-based LevelSeas is backed by BP Amoco, Cargill, Royal Dutch/Shell Group and eVolution Global Partners--a joint investment venture between Kleiner Perkins Caufield & Byers, Bain, and Texas Pacific Group.

    Although LevelSeas executives could not be reached for comment, a representative for the company said Ariba and Commerce One were indeed looked at as possible technology partners for the venture.

    But analysts say pricing and technology configuration probably played a part in LevelSeas' decision.

    "I imagine cost must have played a factor," said Laurie Orlov, an analyst with Forrester Research. "Ariba and Commerce One product prices probably range between $3 million to $10 million."

    Although Orlov said she did not know the pricing model for Idapta products, she said it must be below those of Ariba and Commerce One. Another factor that probably influenced LevelSeas' choice is the way that the technology is built, she said.

    "Idapta's product is a ready to use, out of the gate offering, rather than packaged together from acquired technology like Ariba and Commerce One," Orlov said. "Ariba also tends to do deals teamed with its partners i2 Technologies and IBM, and Commerce One does much larger deals like Covisint." Covisint is the marketplace being launched by automakers Ford Motor, DaimlerChrysler and General Motors.

    Idapta builds software that enables companies to buy and sell supplier goods online using exchange and auction tools and services. The company was founded last year and backed by a $35 million investment from CMGI@Ventures and German software giant SAP.

    But Orlov said in order for Idapta to become a real player in the business-to-business market, the company needs to land more deals similar to the one with LevelSeas.

    "The customer list looks nice, but it is looking a little lean," she said. LevelSeas "is a good start."