By month's end, it will roll out logistics optimization and order collaboration capabilities to let companies automate orders with existing trading partners and integrate their internal business systems with the exchange. By the middle of next year, the venture expects to offer its first demand-planning application. But the real value of using the Web to collaborate comes in creating better management of order flow and providing information about where inventory sits, and better planning for design, assembly, and movement of final products. Industry-sponsored exchanges are typically backed by the top companies in their markets. Chemdex had signed on 2,200 suppliers but only 200 buyers, for example, and Ventro says that wasn't enough to sustain the business.
Volume is another issue.
Ventro is giving it another go as an application service provider, hosting trading exchange apps from Ariba Inc., WebMethods Inc., and others. Ventro hopes that the expertise it gained in integrating diverse E-marketplace components will appeal to other market makers. Whether they'll turn to a company that is itself unable to run a profitable exchange remains to be seen. Ventro also faces as much competition in the ASP arena as it did in the online-marketplace space. It will be at least two to three years before they think about selling on a marketplace.