Abandon All Insecurity, Ye Who Enter Here

Event Summary

Netegrity, Inc. (Nasdaq: NETE) specializes in solutions for secure management of websites. Their flagship product, SiteMinder, is a highly scalable access control system that provides single login over multiple domains and supports a variety of access control mechanisms down to the sub-page level. Commerce One (NASDAQ: CMRC) will bundle SiteMinder into its Commerce One MarketSite Portal Solution, its product that is used by market makers to build and administer digital marketplaces.

Market Impact

Providing the infrastructure for its customers to build and administer sophisticated access mechanisms is a necessary and obvious step for Commerce One to take. It was elegant to choose a solution that allows single login across its own Global Trading Web.

This does not mean that, say, any small business member of some dart board manufacturers' vertical marketplace can just login to the Global Trading Web and order a thousand headlight bulbs from one of GM's suppliers. Any such cross-market activity will have to be specifically authorized. But where authorization exists, or where a company may participate in more than one vertical marketplace, single login is a nice amenity that (we suspect) can later be backed up with value added services that depend on tracking the identity of a customer across marketplaces.

This signing sets a standard that other marketplaces will want to meet or counter by making some kind of announcement about access control; watch for the announcements over the next few months.

User Recommendations

The value of security measures depends on the cost of a breach. For a market maker, whose revenues derive from a functioning, trusted market, the costs of a security breach are measured both in immediate loss of revenue if the site is brought down or forced to close, and in the longer term loss of trust. Also, while most published reports of security breaches involve defacing websites or stealing data, digital marketplaces are clearly potential targets, offering goods and money as tempting as the Topkapi dagger, just waiting for the right band of thieves to make off with a small fortune.

It's hard to imagine that the operators of a marketplace wouldn't want to have as high a level of security as is commensurate with allowing easy access to legitimate buyers and sellers. However, while Commerce One may now have the edge on security, remember that this is only one of many factors to weigh when you make a product selection.