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Chase, Deloitte tap Net office supply sales

The financial giant and services provider plan to form a new company that will provide Internet technology and services to large companies that buy and sell office supplies over the Web.

Financial giant Chase Manhattan and services provider Deloitte Consulting today debuted plans to form a new company that will provide Internet technology and services to large companies that buy and sell office supplies over the Web.

The new company, which hasn't been named yet, will target microcomputers, temporary help, office supplies and other "indirect" purchases, meaning items not related to the company's core business, the companies said.

Chase and Deloitte will be equal partners in the new company, which plans to begin operations by year's end. The combined spending by Chase and Deloitte totals $8 billion.

A number of consulting firms, like Deloitte, have jumped on the business-to-business bandwagon. In December, Pricewaterhouse Coopers launched a business-to-business marketplace designed to deliver price discounts to those who buy goods and services on its network. Around the same time, Andersen Consulting announced a new venture capital unit focused on Internet companies in an effort to establish itself as a major Internet player.

As part of the announcement today, Chase and Deloitte said Intelisys Electronic Commerce, the provider of procurement software to Chase, will provide the new firm with Web-based procurement software and assist in the creation of online purchasing exchanges.

Even with the partnership with Intelisys, one analyst wondered what the new venture will provide in addition to services already offered.

"It's half baked," Laurie Orlove, an analyst with Forrester Research, said of the announcement. "What I didn't see here was any focus on software delivery. It might be hosted, it might be in house. I mean, what's new here?"

Orlove said Deloitte already provides custom procurement projects.

Many companies are falling over themselves to get business-to-business offerings in their services portfolio. Shares in firms that play in the business-to-business technology and services market have soared in recent months--and with good cause. The market for business-to-business transactions is expected to grow to $5 trillion by 2002, according to analysts' estimates. Last month, research firm Gartner Group reported the worldwide business services market would grow from $145 billion in 1999 to about 7 percent of the predicted $105 trillion market for all global sales transactions in 2004.