HP late to e-commerce market
- 03 December, 1996 22:00
Hewlett-Packard this week will announce an initiative designed to provide turnkey solutions for companies wanting to conduct electronic commerce over the Internet.
However, the company may have some catching up to do, because it is entering a market in which most of its major rivals have already launched products and services.
HP is expected to take core technologies for the initiative from the Actra joint venture between Netscape and electronic data interchange (EDI) vendor GE Information Services.
Ray Rike, vice-president of Actra, has confirmed that the company's president, Jim Sha, is due to appear at the launch.
Rike confirms that the companies will be announcing a new business relationship at the launch, and that Actra "will be working with HP to investigate how to provide business-to-business e-commerce solutions".
Actra is preparing two products, both of which are scheduled for launch next year.
The first product, Business Document Gateway (BDG), is due in March 1997, and it is designed to provide the foundation for business-to-business e-commerce on the Internet.
Actra claims that BDG is the first product of its kind to integrate EDI, translation and mapping with Internet connectivity.
The second product, Order Expert, is designed to allow any employee to buy from a company's preferred suppliers, while still retaining centralised control and audit of procurement.
HP is planning to have representatives from Microsoft and Oracle on hand at the launch. HP is not releasing details of the companies' involvement, but Microsoft endorsed HP's recently announced International Cryptography Framework.
This initiative provides an underlying security mechanism for the e-commerce products and conforms to Microsoft's CryptoAPI specification.
HP's encryption system uses embedded technology to store encryption algorithms on downloadable software models or separate smart cards. The technology overcomes the problem of US government restrictions on exporting encryption, because it lets companies use algorithms that are legal within these borders and it enables key recovery.
Some analysts speculate that HP may turn to Microsoft for some of the technologies it needs to service the market for small and medium-size businesses.
"Microsoft has a big small-business push," says Dwight Davis, editor of Windows Watcher, a newsletter based in Redmond, Washington. "HP is no doubt looking at what IBM has been doing lately on the electronic commerce front ... and hasn't had a competitive response. HP doesn't have the resources internally like IBM, so it makes sense that they would go to partners."
Clay Ryder, director of Zona Research, in Redwood City, California, agrees. "Given the history of HP, it's logical that they would work with Microsoft."
Vic Wheatman, vice-president at Gartner Group, says that HP's late entry into the e-commerce market is not necessarily a disadvantage.
It may work in HP's favour. Although the company has risked being overtaken by its rivals, it has had the opportunity to learn from its mistakes and get its products right the first time, Wheatman says.