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GE challenges B2B upstarts with new units

The manufacturing giant plans to compete with the upstart leaders of the burgeoning worldwide market for business-to-business e-commerce.

General Electric wants to be the top dog in the global business-to-business services market.

The manufacturing giant today said it is creating two new units, GE Global Exchange Services and GE Systems Services, to enter the burgeoning worldwide market for business-to-business e-commerce. Through the effort, GE plans to compete with the upstart leaders in the market, Commerce One and Ariba.

GE has been beefing up its Internet strategy over the past six months. Last month, the company said it would launch a business-to-business marketplace for the airline industry. In February, NBC Internet, a unit of GE, launched a portal for high-speed Internet users that offers sports, news and entertainment programming.

GE Global Exchange Services will focus on four markets: Internet data exchange, enterprise application integration software, procurement software and services, and trading partner exchanges. GE Systems Services will provide global technology support to GE Global Exchange Services activities.

GE Information Systems will be the holding company for the two units, and the GE Information Systems name will be retired as a brand name.

Scott Latham, an analyst at AMR Research, said GE may not have the same reach as Ariba and Commerce One, but that it has the potential to challenge their leadership.

"They have been making electronic communities for a long time. If GE can bring the right technology behind their initiative, they have a chance to be a substantial player," he said. "If Ariba and Commerce One don't think this is going to add competition to the market, they're crazy."

While Ariba and Commerce One are relatively new to the area, GE has provided electronic data interchange (EDI) services for more than 15 years. EDI is used to connect trading partners over dedicated communications lines, in much the same way that new business-to-business systems use the public Internet. Latham said that if the new GE units tap into the company's existing EDI customer base, the initiative will gain significant steam.

GE Global Exchange Services will inherit from GE Information Services its large electronic trading community of more than 100,000 trading partners and 1,500 employees.

GE System Services consists of more than 500 employees with offices in Maryland, Ohio, Brazil and Hong Kong.