Content-Type: text/html; charset=UTF-8 Actra News Index





The progeny of Netscape and General
Electric, Actra aims to turn electronic
commerce into big business.
By Andrew P. Madden (Red Herring)
Combine lightbulbs and browsers, and you just may see the
future of Internet commerce. More specifically, combine
General Electric's GE Information Services (GEIS) unit and
Netscape Communications, and you get Actra Business
With this joint venture, these unlikely partners want to blend
GEIS's considerable experience in business-to-business
electronic commerce with Netscape's early efforts in
business-to-consumer Internet commerce. Offering a set of
commerce applications for the Internet and corporate intranets,
Actra was created to contribute to and capitalize on the torrid
growth of Internet commerce.
According to a recent report by Forrester Research, the market
for commerce software will reach nearly $3.2 billion by the year
2000. As for the amount of money exchanged through Internet
commerce, market research reports vary wildly, but the more
optimistic are well into the billions of dollars (see "Give or Take
$100 Billion"). Even the analysts are overwhelmed by the
hysteria. "It's going to be so many trillions of dollars by a week
from next Thursday," jokes Stan Lepeak, vice president at the
Meta Group.
As more and more companies try to put Internet storefronts on
their existing businesses to reach both consumers and other
businesses, the demand for packaged yet flexible commerce
applications rises. Furthermore, companies with sizable
investments in electronic data interchange (EDI) want to find
their way onto the Internet without trashing their existing
systems. To cater to such companies, software vendors need
not only technological smarts but also knowledge of a daunting
range of business practices. According to Actra CEO Jim Sha,
"We recognized very early on that this is not just a technology
play; business expertise is definitely required."
With Netscape and GEIS behind it, Mr. Sha believes Actra
understands what companies need to bring their businesses to
the Internet. He says Actra will help companies reduce costs,
decrease cycle times, and improve the overall quality of their
business. However, Actra's focus is murky in the eyes of certain
industry analysts. The company believes its suite of products will
cater seamlessly to both business-to-business and
business-to-consumer concerns, but this two-pronged strategy
could prove difficult. Though the two markets share certain
characteristics, they may require fundamentally different
In praise of EDI
While Internet commerce has solidified its role as the next big
thing, it should, like a gracious incumbent, probably doff its cap
to EDI. EDI is an arcane system for transferring documents
electronically between businesses that's been in use for more
than a decade. EDI connections provided the first true
mechanism for electronic commerce, enabling computer systems
to perform a variety of tasks like ordering raw materials and
scheduling production. But because of a steep price and the
need for proprietary software at either end of a connection, EDI
has been an option for only the largest of companies. For some
40,000 of them, GEIS is the EDI provider.
That broad base of customers partially explains GEIS's interest
in Actra. With the rise of the Internet, companies like GEIS have
been prompted to find ways to bring closed and proprietary
EDI networks to the open standards of the Internet. According
to Ray Rike, Actra's vice president of sales and marketing and a
former GEIS executive, "We want our customers to be able to
protect their investment in EDI but also allow them to extend
EDI to the Internet."
As a result, Actra considers ECXpert, its EDI-over-the-Internet
product, to be the centerpiece of its CrossCommerce suite.
According to Mr. Sha, "It's a good foundation. We use EDI as
a cornerstone to enable business-to-business transactions, but
we've also addressed the need to build applications on top of
For Netscape, the joint venture can be viewed as more of a
hedge. Netscape believes the commerce market will evolve and
wants to keep its hand in the pot, but it didn't have the inclination
to attack the market without a strong partner. After the
lukewarm introduction of its publishing and merchant server
products, the company began to see its pricey commerce
applications as wayward sheep that were straying from its core
business and its expertise in volume sales of client and server
Internet software. A strategic partnership provided a suitable
mechanism for leveraging Netscape's existing commerce
development and maintaining customer relationships.
Great ECXpectations
Because different industries have unique characteristics and
quirks, a prepackaged commerce product needs to allow for
some alteration. Mr. Sha maintains that companies are typically
faced with two extremes. "On the low end you have completely
shrink-wrapped and uncustomizable solutions, and on the high
end you can do whatever you want, but you have to do it all
yourself," he says. In developing its commercial applications,
Actra has observed open standards, used a distributed
object-oriented architecture, and created a high level of
Hence Actra's insistence that it is an application rather than a
tool company. Its products are designed to permit customization
without the bothersome task of source code modification. And
while this may seem standard, the commerce space is new
enough that Actra will be among the first to offer such flexibility
within an application. Its customers can insert business rules or
logic specific to their needs or those of their trading partners by
choosing from a group of "150 to 200 business rules out of the
box," according to Mr. Rike. Additional logic will be added,
based on customer feedback, in future versions of the software.
Beyond ECXpert, Actra's CrossCommerce suite includes four
other server products. OrderXpert Buyer and OrderXpert
Seller allow a corporation to build a comprehensive online
system with merchandising, transaction processing, and order
processing capabilities for use with other corporations. The
seller product is scheduled to ship in the last quarter of 1997,
and the buyer product is supposed to ship in the following
quarter. MerchantXpert and PublishingXpert, the two products
of the suite that originated with Netscape, let organizations
market and sell products to consumers online. They are in their
third versions and have been available for 18 months.
Since Actra opened its doors in April 1996, a handful of large
companies like Bay Networks, Wells Fargo, and Boise
Cascade have been testing Actra's products. Laura Longcore,
marketing systems manager at Boise Cascade, is using ECXpert
and OrderXpert Seller to complement her company's
long-standing EDI presence and an in-house Internet ordering
system that it uses with Fortune 1,000 customers. According to
Ms. Longcore, the ability to customize the products easily is
essential: "We like the fact that Actra's system is completely
open and that it allows us the flexibility to add things that are
standard to our industry and that probably wouldn't come in a
Another customer, SportsLine USA, a sports-oriented Web site
with free and premium content and a retail store, has been using
Actra's PublishingXpert and MerchantXpert servers. According
to the company's chief technology officer, Tom Eastwood,
SportsLine uses the PublishingXpert server to keep track of
product definitions, membership registrations, profiles, and
billing. The MerchantXpert server processes transactions at its
store, from which customers buy merchandise that SportsLine
then obtains from other merchants. Mr. Eastwood believes that
the store's business-to-consumer and business-to-business
needs are both served well by MerchantXpert. Retailers like
REI and JCPenney have also been using the merchant system,
and publications including The Wall Street Journal, USA
Today, and The New York Times are using the publishing
No business like business-to-business
However, SportsLine's use of Actra's products, for Internet
retailing, and Boise Cascade's use, for business-to-business
commerce, appear quite separate to some industry analysts.
According to Stan Dolberg of Forrester Research, Actra will do
well to stay closer to its GEIS roots. "Some products are part of
a legacy from Netscape, but all of their competency and, I
believe, all of their success will be in the business-to-business
space. The two consumer-oriented storefront products are just
going to be a pain in their neck for a while," he warns.
In a recent Forrester report, Mr. Dolberg provides compelling
evidence of the strength of business-to-business Internet
commerce in comparison with business-to-consumer. Cisco
received nearly $500 million in router and switch orders over its
Web site in 1996. "By stark contrast," he says, saw
cause for celebration when its site's sales reached volumes
equivalent to only two of its countless retail stores during the
1996 holiday season.
One way or the other
Furthermore, according to Mr. Dolberg, the
business-to-consumer side of Internet commerce is sufficiently
different from the business-to-business side that companies like
Actra should pick one or the other. And in the early stages, he
says, it is clear that business-to-business commerce will be much
more lucrative. "It's a completely different set of partners, a
different set of channels, and a different set of competencies," he
says of the business-to-consumer market. "The two are different
enough that companies that fail to focus are going to be roadside
junk in two years," he concludes.
Mr. Lepeak of the Meta Group agrees. "The back end is
similar, but with consumers you have to deal with distinctly
different payment issues like credit cards, as well as very
different types and frequencies of users. There's a thin line
between offering too much right out of the box and not offering
enough," he says. "Actra may have bitten off more than it can
According to Mr. Sha, though, the approach to both markets is
sensible and manageable. "The back-end functions for
business-to-business and business-to-consumer are largely
similar. With the back end, you have to build a product catalog,
you have to process the payment, and you have to deal with
legacy integration and the customer base," he says. "The
incremental investment for addressing a new market is fairly
small because it has to do with the front end." But while Actra
believes that a convergence of business-to-business and
business-to-consumer is taking place, Mr. Rike does
acknowledge that the two markets are still somewhat separate.
"We're not saying there aren't unique requirements for each," he
Have faith, ye doubters
Harry Tse of the Yankee Group, is more optimistic about
Actra's double-barreled approach. He believes it can usefully
apply its business-to-business heritage to the consumer market
on the grounds that business-to-consumer is really a smaller part
of business-to-business. "Coming from the business-to-business
side gives them a good understanding of the ins and outs,
politics, and procurement policies. Once you have established
these things, business-to-consumer is actually a small subset of
the functionality." That said, though, Mr. Tse agrees that the
revenues are currently to be found in the corporate world: "I
think for the foreseeable future, Actra's business model leans
heavily toward business-to-business."
In that corporate space, competition is fierce, and, according to
Mr. Lepeak, Actra needs to make its presence felt quickly.
"We're a little disappointed with the delivery in terms of real
products coming out and in terms of relationships established
with large companies," he says. "The products look all right.
Actra just doesn't have much of a track record."
Company with a past
Some of Actra's competitors do. Dallas-based Sterling
Commerce is often cited as Actra's primary competitor; it too
comes from an EDI background, and with its Gentran server,
introduced in late 1992, and Web Suite products, introduced
this March, it has been on the scene for a while. Furthermore,
Sterling can boast of a solid relationship with Netscape's
nemesis, Microsoft, and it offers extensions to Microsoft's
merchant server. "We know the ropes," says Susan Eskin, vice
president of marketing and product management at Sterling.
"Our software products have had to serve the needs of not only
our largest customers but also their smallest trading partners."
Sterling also believes its long-standing customer relationships
and distribution channels serve to differentiate it from the
Meanwhile Actra, though new, will have the benefits of tapping
into Netscape's current distribution channels and GEIS's long list
of EDI customers. The company also plans to create a
dedicated sales organization to implement and support Actra
products. Such attention to customer service is crucial when
dealing with costly, and occasionally confusing, software
If the pundits are correct about the growth of Internet
commerce, Actra will be left with no shortage of customers and
its customers with no shortage of trading partners. The company
and others like it are clearly betting that, in the not too distant
future, Mr. Lepeak won't be induced to chuckle when he
mentions trillions of dollars and Internet commerce in the same
Actra Business Systems at a glance
CEO: Jim Sha
Location: Sunnyvale, California
Phone: 888/706-2600
Ownership: Private
Founded: April 1996
Employees: 150
Product: Internet-based electronic commerce
Investors: Netscape, General Electric

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