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Oracle sews up medical-supply marketplace deal

The software maker has won out over counterparts Ariba and Commerce One and will build an online marketplace that will connect medical-supply buyers, sellers, distributors and manufacturers.

    Oracle has won out over business-to-business software heavyweights Ariba and Commerce One, snagging a deal to build an online marketplace targeting the medical-supply industry.

    The company signed the deal with San Francisco-based MedChannel, which will announce the partnership on Thursday. The MedChannel Collaborative Healthcare Network will connect medical-supply buyers, sellers, distributors and manufacturers online.

    Oracle has also established a future equity stake in the company, meaning that it is expected to invest in the venture at a future date. No other financial details were provided.

    MedChannel's decision to go with Redwood City, Calif.-based Oracle over Ariba and Commerce One marks the second time in recent weeks that the two e-commerce software makers have been overlooked.

    Last week, the two were trumped by little-known software maker Idapta in a deal to build a new marketplace for a group of major ocean shipping companies.

    "We looked at both companies," said Denis Reilly, MedChannel's chief operating officer. "We have been a customer of Oracle for some time, and chose them for technology reasons. Our internal system is built by Oracle, and a lot of our partners use Oracle for their database and ERP (enterprise resource planning) systems, so it made perfect sense to go with them."

    Analysts said MedChannel's decision also had to do with technology integration.

    "Integration is highly significant from a customer's standpoint," said Joshua Greenbaum, an industry analyst who heads Enterprise Applications Consulting in Berkeley, Calif. "One reason is if you've already invested in Oracle internally, it would ease the implementation of your marketplace and helps get the exchange up and running faster."

    Through its relationship with Oracle, MedChannel said it will integrate the Oracle Exchange Platform, the software company's business-to-business software, into its back-end systems.

    "Although Oracle may not provide the best in class for every aspect of the marketplace," said Meta Group analyst Hollis Bischoff, "they do provide a complete solution."

    MedChannel's Collaborative Healthcare Network, which is expected to go live in the fourth quarter, will provide online transaction tools and services including contract price management, forecasting and secure content management, the company said.