Founding Partners: Hitachi, IBM, LG Electronics, Matsushita Electric (Panasonic),
Nortel Networks, Seagate Technology, Solectron, Toshiba
Technology Partners: Ariba, IBM, i2
Financial Partners: Crosspoint Venture Partners, Morgan Stanley Dean Witter
Strategic Advisors: McKinsey & Company, Morgan Stanley Dean Witter
Hitachi, IBM, LG Electronics, Matsushita Electric (Panasonic), Nortel Networks, Seagate
Technology, Solectron, and Toshiba, along with technology
partners Ariba and i2, today announced the creation of e2open.com, an independent, global
business-to-business e-marketplace for the computer, electronics, and telecommunications
industries.
The new e-marketplace will run on technology provided by Ariba, IBM and i2.
e2open.com's electronic marketplace will bring together thousands of computer, electronics
and telecommunications companies -- of all sizes, worldwide -- to plan, manage and execute
supply-chain transactions over the internet. Today, these companies account for
approximately $700 billion of goods and services bought and sold in the worldwide electronics
industry's supply chain.
"e2open.com will revolutionize the way business is done," said Charles Childers, chief
marketing officer, Nortel Networks. "It's a clear example of how the high-performance Internet
can help companies better forecast and meet customer demand, improving collaboration between
a buyer and its suppliers, communication and commerce."
"Three characteristics make e2open.com different from any other e-marketplace," said John
Mumford, acting CEO of e2open.com and a founding partner of Crosspoint Venture Partners.
"First, we're already in business and working together as partners. Second, we have a clear
strategy to move forward, as evidenced by our decisions to build this e-marketplace on the
technologies of Ariba, IBM and i2. And third, we are well financed, with more than $200 million of
financing commitments from the founding partners and our financial partners, Crosspoint Venture
Partners and Morgan Stanley Dean Witter."
Operations are expected to begin by mid-July, with the roll-out of additional functions
within 12 months. Under the leadership of Mr. Mumford, e2open.com will begin start-up
operations immediately.
Recruitment of management is underway and the location of the operation will be determined
by the new management.
"We have been approached by a number of exchanges," said Ken Lee, senior vice president,
LG Electronics Inc. "We chose to help form the e2open.com e-marketplace because of the
capabilities of the founders group and our expectation to both reduce costs and increase
productivity."
"Matsushita Electric (Panasonic) has joined e2open.com because we value worldwide, open
and efficient purchasing operations," said Kazuhiko Sugiyama, executive vice president,
Matsushita Electric Industrial Co., Ltd. (Panasonic). "We believe that the electronic
marketplace using the Internet offers advantages in terms of lower procurement costs,
better quality, shorter delivery times and overall improved operational performance."
"As a leading provider of Internet infrastructure, focusing on Internet storage solutions, we
have embraced a strategy that emphasizes the importance of e-business," said Lam Truong, senior
vice president, E-Business Strategy, Seagate. "The e2open marketplace fits well into Seagate's
new business direction."
For buyers, benefits will include: reduced infrastructure costs, reduction of unauthorized
buying, lower working capital requirements through lower inventory, and transportation and
logistics efficiencies. For sellers, benefits will include: enhanced ability to service smaller
customers, direct access to customers, lower customer acquisition costs, increased access to
global trading partners, reduced transaction handling and processing costs.
The e-marketplace will be hosted and built by IBM Global Services, using the
technology of Ariba, IBM and i2. Ariba expects to provide key components of the Ariba B2B
Commerce Platform, including the Ariba Dynamic Trade for auctions, reverse auctions
and bid-ask exchanges. Participants may also use the Ariba Buyer, ASP Edition, a hosted
e-procurement solution to outsource the indirect procurement function of their
organization.
i2 will be providing its TradeMatrix e-marketplace enabling technology that will
allow multi-enterprise collaboration for demand management and supply chain
management over the Internet. For example, companies will be able to communicate
changes in production schedules to suppliers hosted on the e-marketplace, allowing more
efficient production planning and logistics for all e2open.com participants. Aspect
Development, which has announced its intent to merge with i2, will provide its Discovery
search engine, its content of electronic components from more than 1,000 suppliers and its
new Content Exchange software that enables suppliers to quickly upload new product
and pricing information.
In addition to providing WebSphere Commerce Suite software, IBM expects to
license some key applications to the e-marketplace: its Singapore-based components
exchange and an existing IBM-owned subscription service which allows electronic
component manufacturers to collaborate on design and new business opportunities with
marketing reps and distributors.
With the availability of the IBM component exchange, e2open.com launches with
technology in place which is capable of handling more than $1 billion in annual
transactions. The e-marketplace expects to license additional technologies from the
founding technology partners as well as from other future participants.
"IBM has the B2B e-commerce capabilities essential to the success of this ambitious e-
marketplace," said Stephen M. Ward, Jr., general manager, Global Industrial Sector, IBM, "and
we are pleased to bring that expertise to e2open.com and its founders. e2open's initial group
of founders and partners has a strong, viable business model with recognizable, dynamic and
proven leadership.
With IBM's implementation expertise, we can enable the e-marketplace to function smoothly,
providing the openness, neutrality and efficiency that will make this marketplace a success."
OWNERSHIP and FINANCING
The founders and the technology and financial partners have each signed a letter of
intent to form e2open.com. The parties expect to sign definitive agreements in the near
future and intend to launch the new entity that will own and operate the e-marketplace
this summer. Founders of e2open.com are expected to contribute up to $125 million in
equity capital to the e-marketplace. Half of the e-marketplace's equity will be shared
equally among the founders. Going forward, each founding partner's equity in
e2open.com is conditioned on the transaction volume generated by the founders for
e2open.com.
Crosspoint Venture Partners and Morgan Stanley Dean Witter, as the financial
partners in e2open.com, are expected to commit $80 million to finance the start-up
operations of the e-marketplace and will own 20 percent of the new business. A
significant share of the equity in the e-marketplace has been reserved for management.
Additional equity will be available for issuance to future e-marketplace users and will be
contingent upon their usage of the e-marketplace.
E2open.com website: www.e2open.com (as of 9 a.m. EDT June 7, 2000)
ADDITIONAL INFORMATION, STATEMENTS AND Q&A
FOUNDING PARTNERS PROFILES:
Hitachi, Ltd.
Hitachi, Ltd., headquartered in Tokyo, Japan, is one of the world's leading global
electronics companies, with fiscal 1999 (ended March 31, 2000) consolidated sales of
8,001 billion yen ($75.5 billion at an exchange rate of 106 yen to the dollar).
The company manufactures and markets a wide range of products, including computers,
semiconductors, consumer products and power and industrial equipment. For more information
on Hitachi, Ltd., please visit Hitachi's Web site at http://www.hitachi.co.jp.
IBM
IBM is the world's largest information technology provider (hardware, software and
services ) with 1999 revenues of more than $87 billion and is the worldwide leader in
e-business solutions. The company has more than 300,000 employees and does business in
more than 160 countries. For more information on IBM, please visit www.ibm.com.
LG Electronics
Since developing Korea's first radio in 1959, LG Electronics has pioneered and led the
Korean electronics industry for over four decades. Spanning the globe through operations
in 27 countries and distribution throughout 150 nations, LGE is now forging its image as
a leading global enterprise. LGE is an integrated electronic goods manufacturer, with
products ranging from consumer electronics and home appliances like TVs, VCRs, refrigerators,
and air conditioners to display devices such as CPTs/CDTs, monitors, PDPs, and information
systems products including CD-ROMs and PCs.
Matsushita Electrical Industrial Co. Ltd. (Panasonic)
Matsushita Electric Industrial Co., Ltd. (NYSE:MC), one of the world's leading developers
and producers of digital electronic products for the home, the office, and in between,
recorded annual sales of $68.86 billion in the fiscal year ended March 31, 2000.
Based in Osaka, Japan, and best known by its Panasonic brand, Matsushita Electric has some
290,000 employees worldwide, with overseas operations that include over 220 companies in
46 countries and regions.
The company's principal North American subsidiary is Matsushita Electric Corporation of
America which, along with its affiliates, operates 24 manufacturing sites and employs
23,000 people.
For more information, visit Panasonic at http://www.panasonic.co.jp/corp/global.
Nortel Networks Corp.
Nortel Networks is a global leader in telephony, data, e-business, and wireless solutions
for the internet. The company had 1999 U.S. GAAP revenues of US$21.3 billion and serves
carrier, service provider and enterprise customers globally.
For more information, please visit www.nortelnetworks.com.
Seagate Technology, Inc.
Seagate Technology, Inc. (NYSE:SEG) is a leading provider of the Internet Infrastructure
enabling people to store, access, and manage information. The company is committed to
providing best-in-class products to help people get information when, where and how they
want it. Seagate is the world's largest manufacturer of disc drives, magnetic discs and
read-write heads, an innovator in tape drives, Storage Area Network (SAN) solutions and
a leading developer of Business Intelligence software. Seagate can be found around
the globe and at http://www.seagate.com.
For automated news, stock and financial information by phone, dial toll-free 877-SEG-NYSE.
Outside the U.S. and Canada, dial 760-704-4368.
Solectron Corp.
Founded in 1977, Solectron Corporation (www.solectron.com) is the world's largest
electronics manufacturing services company offering a full range of integrated supply-chain
solutions for the world's leading electronics original equipment manufacturers.
Solectron's integrated technologysolutions, materials, manufacturing and operations, and
global services offer customers competitive outsourcing advantages, such as access to
advanced manufacturing technologies, shortened product time-to-market, reduced total cost of
ownership and more effective asset utilization.
Thecompany has more than 47,000 associates in 45 locations worldwide, with more than 9 million
square feet of capacity.
Net sales for the first six months of fiscal year 2000 ended Feb. 25, 2000, reflecting
the merger with SMART Modular Technologies, Inc., were US$5.6 billion.
Toshiba Corporation
Toshiba Corporation is a leader in information and communications systems, electronic
components, consumer products, and power systems. The company's integration of these
wide-ranging capabilities assures its position as a leading company in the industry.
Toshiba has 191,000 employees worldwide and annual sales of over $50 (US) billion.
Visit Toshiba's website at http://www.toshiba.co.jp.
TECHNOLOGY PARTNERS PROFILES:
Ariba, Inc.
Ariba, Inc.(Nasdaq: ARBA) is the leading business-to-business (B2B) e-commerce platform provider.
Through the Ariba B2B Commerce Platform -- an open, end-to-end infrastructure of interoperable
software solutions and hosted web-based commerce services -- the company enables efficient
online trade, integration and collaboration between B2B marketplaces, buyers, suppliers and
commerce service providers. The global reach and best-of-breed functionality of the Ariba B2B
Commerce platform creates Internet-driven economies of scale and process efficiencies for
leading companies around the world, including more than 20 of the Fortune 100.
Ariba can be contacted in the U.S. at (650) 930-6200 or at www.ariba.com.
i2
i2 Technologies, Inc. (Nasdaq: ITWO) is the leading global provider of intelligent eBusiness
solutions.
Founded in 1988, i2's vision is to add $50 billion of value for its customers by the year 2005.
i2 is headquartered in Dallas, Texas, has approximately 3,600 employees, and maintains offices
worldwide. TradeMatrix(TM) is i2's flagship electronic business solution that enables
companiesto deploy business-to-business and business-to-consumer portals.
Aspect Development, Inc. and i2 Technologies, Inc.
have announced an agreement to merge subject to shareholder approval.
Shareholder voting to approve the merger is scheduled for June 8, 2000.
Visit i2's Web site at www.i2.com. i2 and the i2 logo design are registered trademarks of i2
Technologies, Inc. TradeMatrix is a trademark of i2 Technologies, Inc.
FINANCIAL AND ADVISORY PARTNERS PROFILES:
Crosspoint Venture Partners
Crosspoint Venture Partners is a leading Silicon Valley early stage venture capital firm with
more than $2 billion in capital.
Crosspoint is the most active B2B e-commerce first round investor with over 50 B2B
investments, including 10 open industry exchanges such as Petrocosm, buzzsaw.com, NovoPoint,
and Rooster.com. Crosspoint Venture Partners website address is www.cpvp.com.
Morgan Stanley Dean Witter
Morgan Stanley Dean Witter & Co. (NYSE: MWD) is a global financial services firm and a market
leader in securities, asset management, and credit services. The Company has offices
in New York, London, Tokyo, Hong Kong and other principal financial centers around the world
and has 488 securities branch offices throughout the United States.
McKinsey & Company
McKinsey & Company is an international management-consulting firm that serves leading
corporations and organizations in most industrial nations and many emerging markets.
With approximately 6,000 consultants in 43countries, McKinsey is dedicated to helping clients
make distinctive, lasting and substantive improvements in their performance. McKinsey provides
a range of services to meet the needs of emerging Internet businesses."
ADDITIONAL FOUNDING PARTNERS STATEMENTS:
Hitachi ,Ltd.
"The foundation of the e2open.com is expected to contribute to further development of the IT
industry. The participating companies' value chains, consisting of a number of their
customers and business partners, will be tied up with the worldwide value chain of e2open.
This will create business opportunities based on the new e-marketplace," said Hiromi Kuwahara,
managing officer and deputy general manager, Information & Telecommunications System Group.
Toshiba Corporation
"We believe that e2open.com will show the true potential solution in B2B," said Atsutoshi
Nishida, vice president of Toshiba Corporation. "By providing an independent e-marketplace for
computers, electronics and telecommunications, three of today's most dynamic business areas,
e2open.com will provide a global impetus for companies to enhance procurement and sales of key
components and products.
Toshiba is proud to be a founder member of e2open.com and will seek to promote its development
and success."
TECHNOLOGY PARTNERS STATEMENT:
Ariba, Inc.
"The breadth and depth of the technology powering the e2open.com exchange will play a
tremendous role in its success," said Larry Mueller, president and COO, Ariba, Inc.
"Auctions and bid-ask exchanges, powered by the Ariba Dynamic Trade solution, will provide high
added value to both buyers and suppliers, and transactions and buyer liquidity will be aided by
hosted on-ramps to the exchange powered by Ariba Buyer.
We look forward to providing this critical infrastructure to e2open.com through the Ariba B2B
Commerce Platform."
i2
"Today, we are seeing the evolution of B2B e-marketplaces, including those powered by i2's
TradeMatrix, go well beyond traditional trading networks to provide a collaborative environment
linking multiple trading networks, individual buyers, suppliers and service providers," said
Sanjiv Sidhu, CEO of i2. "These B2B e-marketplaces not only represent the next stage of the
Internet economy, but also provide the catalyst for tremendous growth in B2B trade. Executing
on our vision, i2 has delivered over $7 billion of value to our customers. We are pleased to
include the new e2open.com customers and partners in our expanded scope of value delivery."
Cautionary Language
Certain statements in this news release contain "forward-looking" information that involves
risk and uncertainty, including projections for new business and new business opportunities,
technological functionality, value potential, and implementation of the computer, electronics
and telecom e-marketplace. This forward-looking information is based upon a number of
assumptions including assumptions regarding the participants' ability to reach agreement on
the definitive documents and attract appropriate management; technological feasibility;
stability and security of delivery systems; reliability of professional service providers and
software; efficiencies resulting from use of the E-marketplace; current and future markets for
the E-marketplace's products and services; adaptability of customer requirements for
procurement and sale to an e-commerce format; volume of usage of the E-marketplace; customer,
supplier and subcontractor adoption of the E-marketplace's services; government policies and
actions, including regulatory approval processes; and successful negotiation of contracts with
the technology providers and certain founders which plan to contribute existing e-businesses
to the E-marketplace. Additional information regarding these factors is contained in the SEC
filings of certain of the founders.
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