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Connect reconfigures purchasing

The PurchaseStream packaged application will let employees of large companies bypass corporate purchasing departments and will ship on Monday.

Internet commerce firm Connect (CNKT) on Monday will release PurchaseStream, a packaged application that lets employees of large companies bypass corporate purchasing departments.

The new product comes as Connect tries to differentiate itself as a vendor of Internet applications, not a turnkey Internet commerce vendor. Connect is struggling after a bad first quarter; its CEO quit recently after first-quarter revenues came in lower than expected.

PurchaseStream will complement Connect's existing OrderStream software for vendors that sell to large companies. Both are targeted at large companies that want finished products that can be customized for their needs, not tools to build their own applications from scratch.

PurchaseStream lets purchasing departments authorize individuals to make purchases of specific items from approved vendors. This cuts paperwork and delays in ordering, while allowing purchasing executives to control spending and designate sellers. An add-on to the software lets it work with existing EDI (electronic data interchange) systems.

A recent Giga Information Group study suggests that products like PurchaseStream could save as much as 45 percent on buying goods. Connect claims companies spend an average of $150 to process each purchase order, regardless of the order's size.

Competition in the corporate purchasing niche is heating up. Actra Business Systems, a joint venture of Netscape Communications and EDI specialist GE Information Services, will introduce similar products May 19. Microsoft also is moving in to the business-to-business e-commerce space with an announcement set for Monday.

In addition, Nets Incorporated, which operates the Industry.Net shopping mall for manufacturers, is evolving into a service to let large manufacturers buy from regular suppliers. Commerce One, headed by former Sybase CEO Mark Hoffman, recently announced a similar service itself.