Oracle, Chevron, Wal-Mart Unit Form B2B Exchange

Software giant Oracle Corp., oil company Chevron Corp. and a unit of Wal-Mart Stores have announced plans to create an online supply exchange for the convenience store industry.

According to company officials, the new B2B network will link convenience stores to suppliers by way of Oracle’s electronic-business platform, Chevron’s existing retail Internet business plan and the convenience-store distribution network of Wal-Mart’s McLane Company.

The new online marketplace will be named and is expected to be up and running by the summer of 2000. Officials say it will initially target convenience stores, such as Chevron’s 8,100 service station stores, but could later be expanded to other types of small to medium-sized stores.

Oracle is Junior Partner

Despite supplying the software for the new operation, Oracle remains “a junior partner in this exchange,” according to company CEO Larry Ellison. “We bring together all of the retailers with these convenience stores from very, very large operators like Chevron to small mom-and-pop stores, and bring together all of the suppliers, all of the retailers, to where they can officially conduct business — buy and sell products,” Ellison added.

Oracle’s technology has been in high demand of late. Last month, Oracle announced its involvement in a B2B deal with Sears Roebuck and Co. and France’s Carrefour Supermarche. Additionally, Ford Motor Co., GM and DaimlerChrysler AG agreed last month to combine their online purchasing in a centralized auction site run with software from Oracle and Commerce One, Inc.

Reduce Operating Costs

“A few years ago, we realized how the Internet could significantly reduce our operating costs, transform our business processes and establish a platform for growth,” said Chevron Corp. chairman and CEO Dave O’Reilly. “This continues the implementation of our strategy to identify, incubate and participate in the creation of independent, open marketplaces.”

According to a recent report by Forrester Research, a vast majority of U.S. corporations will move aggressively to e-commerce in the next two years, drawn by emerging “e-marketplaces” where goods are sold through auctions, bid systems and exchanges.

The study — one of several on business-to-business (B2B) e-commerce issued recently by major U.S. research firms — predicts that U.S. B2B sales will reach $2.7 trillion (US$) in 2004, as e-commerce evolves from one-on-one transactions to larger marketplaces that facilitate multiple buyers and sellers.

The Forrester study is similar to a recent study reported in the E-Commerce Times by GartnerGroup that also predicts that electronic marketplaces, driven by “e-market makers,” will grow explosively.

By 2004, GartnerGroup predicts, these “e-market makers” will be responsible for $2.71 trillion in e-commerce sales transactions worldwide, representing 37 percent of the overall B2B market and 2.6 percent of worldwide sales transactions.

The Next Two Years

“U.S. businesses are universally preparing to buy and sell online, leveraging the Net to build deeper relationships with their business partners,” said Steven J. Kafka, e-business trade research analyst at Forrester. “But the rampant growth of online trade through these one-to-one business connections will taper off after 2001, as firms more actively participate in e-marketplaces to connect with a wider universe of buyers and sellers.”

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