Sleeping With the Enemy

The IBM-I2-Ariba alliance is a classic case of "coopetition"

How does a company reconcile the apparently contradictory axioms "only the paranoid survive" and "no business is an island?" Open standards, collaboration, and partnerships with best-of-breed solutions are the touch points of the New Economy, but business has always been a dog-eat-dog world. And the recent IBM-I2-Ariba alliance is a case in point.

Nowhere do companies need to balance these conflicting credos more than in the emerging e-marketplaces and exchanges. Jupiter Research is projecting that e-marketplaces will account for 35 percent of U.S. business-to-business (B2B) online commerce by 2005, totaling $2.2 trillion in spending.

Analysts urge companies to make their supply chains more efficient (and more cost-effective) by making their products' entire life cycle visible to partners, suppliers, and far-flung designers and engineers. With the majority of a product's cost set during the design phase, opening up your intellectual property to suppliers and partners early in the development cycle can save you money.

CEOs are boldly announcing that trust and collaboration will be the driving forces behind the achievement of the economic ideal: the perfect marketplace, where information flows freely, actions are transparent and real time, and response times are instantaneous.

But the gritty reality of coopetition may be the snake in this Utopia. AMR Research notes a surprising increase in the number of IT partnerships among competitors, mainly marketing-driven. Although companies may wish to promote openness and partnerships with best-of-breed solutions, they are very aware that they may be nurturing a potential rival. Companies can be partners for one deal and competitors for another.

With this understanding in mind, analysts are approaching the B2B alliance of IBM, I2 Technologies Inc., and Ariba Inc. with caution. Because I2 and Ariba are beginning to overlap each other in areas such as procurement, collaboration tools, and supply chain management, the question of how strong this integration can be becomes paramount.

David C. Rawlings, a global offerings executive in IBM's Supply Chain Management Services, comments." We always knew it [the I2 and Ariba partnership] was going to be a problem." But IBM has learned from previous industry mistakes: IBM is not interested in being a major equity player in either company, so both companies can be confident in IBM's neutrality. As the "glue" that holds this alliance together, IBM chooses which technology to include in the combined solution and provides the majority of developers and consultants.

To further calm concerns that the partnership is shaky, the companies recently announced at the Planet 2000 conference in San Diego that they are extending their reseller agreements: Ariba will now resell I2's TradeMatrix products, including I2 Infinite Content, Content Services, Sell Solutions, Collaborative Services, and other TradeMatrix components. (Agreements were already in place in which I2 can resell Ariba products such as Ariba Marketplace, Ariba Dynamic Trade, and Ariba Buyer, and in which IBM can resell products from both companies.)

Unlike the rival alliance between SAP and Commerce One, both I2 and Ariba still sell competing products rather than exclusively marketing a combined solution. In fact, AMR Research reports that sales reps from I2 and Ariba cooperate on some deals while competing on others.

Perhaps the New Economy is not so much about trust and collaboration, but a variation on an old maxim: Keep your suppliers and partners close, but keep your com petition even closer.— Michelle Nichols

Will Americans Vote Online?

The ultimate outcome of the Florida fiasco may be more than our 43rd president. It could be a new way of voting.

"The technological components for a secure, reliable system for online voting are there. What's been missing is the desire by the public to move on it," says Tim Dierks, chief technology officer at Certicom Corp., a provider of information security software and services.

Security concerns rank high in discussions about electronic voting. But, Dierks observes, "today's system isn't incredibly secure either." Poll workers rarely ask for proof of identification and voters provide none when requesting absentee ballots. "It may be inappropriate to set a huge bar for Internet voting."

More than 40,000 Arizona Democrats would agree. In their presidential primary, they - nearly half of the state's voting Democrats - voted online. Election.com ran the online part of the primary in which voters cast ballots from home or from computers at polling places. They selected candidates, clicked "yes" confirmations and viewed summaries suitable for printing.

"We did a good job of preventing system infiltration," reports Bill Taylor, Election.com vice president for strategic development, including a reported hacker attack arranged by the National Journal.

The system uses standard SSL technology for transmitting information, and PKI encryption. The servers, in secret locations, are equipped with digital certificates for authentication purposes and protected with biometric security measures. The entire system is protected environmentally with Statefull Failover to preclude single-point failures.

E-voting could be big business. Meta Group pegs the cost of creating and deploying a national Internet-based voting system at $175 million to $250 million. To handle over 204 million eligible U.S. voters, the system would require 150 individual Web sites outfitted with 300 dual-CPU Web servers, 450 four-CPU application servers, and 450 four-CPU database servers.

Although the specter of Florida looms over online voting, don't expect "pregnant pixels" or "dangling digits" to become part of today's lexicon.

"There'll always be glitches, mechanical and human," says Election.com's Taylor. "We believe that online voting will smooth those bumps and provide more accurate results."

Michelle Nichols