Life-sciences E-commerce Supplier Grows

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Event Summary

Chemdex (Nasdaq: CMDX) brings buyers and sellers of life sciences materials and equipment together in a specialized marketplace that offers everything from O-rings to living organisms. Chemdex has announced MarketLink, system that integrates Chemdex' marketplace with corporate ERP systems and other third party purchasing systems. According to the company, MarketLink will "provide connectivity and integration throughout the purchasing process from requisition generation to order submission, invoicing and payment." In an independent announcement, Chemdex and IBM revealed that IBM Global Services will be the systems integrator of choice for Chemdex products.

Market Impact

Although vertical marketplaces have been thought of as a breed apart, their members have the same needs as other companies. They too have back-end financial and ERP systems that want to be fed data in the right form, and need to purchase the same MRO supplies as everyone else. In what appears to be a wholesale adoption of XML as a document delivery mechanism, Chemdex is redefining the expectations for vertical marketplaces by satisfying both of these needs. The ability to interface to corporate backend systems will be a significant cost saver for the members of the Chemdex marketplace. Partnering with third-party purchasing solution vendors Ariba and Concur probably benefits those companies more than it does Chemdex. All Chemdex users are potential customers for the less specialized product lines offered by Ariba and Concur, while relatively few transactions are likely to go the other way. Even so, with 75 percent of Chemdex revenues ($11 million in the nine months ending in September 1999, with $8 million from the last quarter) derived from only four customers, relatively small additions to the Chemdex customer base could be highly significant to the company.

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