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Open Market slashes prices

The maker of e-commerce systems announces big price reductions for its Transact product.

High-price leader Open Market slashed the price of its Transact commerce system from $125,000 to $65,000 today, less than a month after a poor earnings report resulted in layoffs.

Open Market also said it has created about 15 add-on modules that cost $20,000-30,000 each for fraud control and other functions. Some of those modules were previously part of the full-priced Transact software, but others are new.

Pricing on Open Market's LiveCommerce catalog tools remains $45,000, but Open Market now throws in consulting services for the same price.

"It's a step in the right direction, but my sense is that they're running into tremendous pressure from Microsoft's Site Server and I'm not sure this is going to be enough," said analyst Bob Chatham of Forrester Research.

"The price tag is going to be over $100,000 and it takes 60 days to implement," he added. "I really want to them to succeed, but I don't think it'll separate them from Site Server pack."

But Open Market's Jeff Bussgang, vice president of marketing, insisted, "we are not seeing pricing pressure in the marketplace. The problem was that previously we offered a bundled package that was more than some needed and less than others needed."

Vernon Keenan, e-commerce analyst at Keenan Vision, thinks the complicated pricing structure will hurt Open Market. And, he said, "there's no marketing plan to support it."

Open Market CEO Gary Eichhorn, who said he expects no short-term impact on revenues, presented the new pricing as a way to allow companies to implement e-commerce strategies in stages. Long-term, he expects average prices to decline but the number of customers to increase.

Open Market positions Transact as an e-commerce application, as opposed to toolkit approaches from Microsoft, IBM, and others. The company argues that Transact gets merchants up and running faster. Even so, Open Market's software requires custom integration work to connect to legacy systems.

For catalog software LiveCommerce, additional modules are available for parametric searching and for personalizing a catalog for a specific user or company.

Transact is offered in separate models for physical goods, digital goods, and subscription-based businesses. The base system includes a secure shopping cart, order system, self-service order status, and shipping for hard-goods merchants. Add-on modules for an extra price include advanced customer service, digital coupons, real-time credit card payment, tax calculation, and fraud screening,

Earlier this week, Open Market made a series of announcements timed with its customer conference. They include support for XML (eXtended Markup Language), America Online as a new customer, and certification from Hewlett-Packard for integrating HP's MC/ServiceGuard failover protection into Transact.