Ariba adds food to menu of marketplaces

The company today said it has teamed with food and agricultural conglomerate Cargill to build Novopoint.com, which will link food and beverage manufacturers to their suppliers and partners over the Internet. It plans to launch the site this summer.

The deal is just the latest in a business-to-business boom that has won attention for both its sheer size and the number of powerful participants, including database software maker Oracle, retailer Sears and automaker Ford. Leading research firms estimate that the market will be worth between $2.7 trillion and $7.3 trillion by 2004.

The Novopoint marketplace helps buyers and sellers of food ingredients, packaging and related services to connect with one another, conduct transactions and better manage their supply chains, the companies said in a statement. Novopoint, which will operate as a neutral, independent company, will serve participants of all sizes in the giant food industry, including buyers and suppliers of oil, sugar, packaging and freight.

Ariba, which makes software that enables companies to link to their buyers, suppliers and partners over the Internet, has been moving aggressively in the closely watched business-to-business e-commerce market in an effort to nab mind share from a wide range of competitors, including rival Commerce One and database software giant Oracle.

Yesterday, Ariba joined forces with computing giant Dell. Under the agreement, Dell said it would create a business-to-business marketplace for its small and medium-size customers using Ariba's software for linking businesses on the Ariba network. Dell said it would also take an equity stake in Ariba and would become the "leading hardware supplier" to the company.

In recent weeks, Ariba has announced several deals to build marketplaces aimed at a number of industries, including travel, gas, chemical and pharmaceuticals, with the promise of dramatically cutting supply chain and internal purchasing costs for marketplace participants.

Novopoint will focus on simplifying business conducted between food and beverage manufacturers and their suppliers, with customized features for individual users, the companies said in a statement.

Minneapolis-based Cargill said it is an initial minority investor in Novopoint. In addition, Crosspoint Venture Partners, which specializes in business-to-business e-commerce investments, is an investor in the new marketplace. As part of the deal, Ariba said it will provide the technology and software to run the marketplace and will share in a transaction-based revenues model.

The companies said discussions are under way with other players in the food and beverage industry that could be potential investors and hold the majority of equity in Novopoint.