DUBLIN, OHIO (Sept. 27, 3:50 p.m. EDT) — Little about the operational headquarters of ECOutlook.com suggests the company´s true purpose.
No multimillion-dollar servers groan in the background at the computer company´s Dublin facility, near Columbus, Ohio. No Silicon Valley, rolled-up-sleeves frenzy heats these offices, ensconced in a quiet Midwestern office park.
Yet, amid the Cubist matrix of work partitions and low-key banter beats the heart of a lion.
Several major plastics companies — among 15 customers connected to more than 1,200 trading partners — have started using ECOutlook as a pass-through to manage the everyday activities surrounding the electronic buying and selling of products.
The company even has lured the current and two former presidents of the Society of Plastics Engineers to help form a sales team. Those three — current SPE President James Brackeen and past presidents Jay Gardiner and Norman Behn — are preaching the gospel of the Internet to the unwashed processor masses.
"Processors are going to use the Internet as a basic business tool," said Brackeen, ECOutlook senior vice president of business development. "I believe it will be as fundamental to business as electricity. You can´t view it as an adversary or you will get killed."
Yet, with all the talk, what will drive ECOutlook´s success is whether it can convince companies to trust it. The computer firm controls the flow of orders placed, the guts of a business.
Its Web-hosted approach already has generated its share of impressive venture-capital backing — and dissent from competitors. ECOutlook co-founder James Paat raised the flag for ECOutlook´s place in the Internet gene pool.
"I´d call our service a clearinghouse, pure and simply," said Paat, ECOutlook president and chief operating officer, during a July visit to Dublin. "We do the hard work so other companies don´t have to worry about it. Costs come out of business processes, and efficiency goes in."
Some companies have put a leg in the water to work with ECOutlook, at least on a pilot-project basis. They include resin providers BASF Corp. of Mount Olive, N.J., and both Houston-based Lyondell Chemical Co. and joint-venture partner Equistar Chemicals LP.
Other clients include Huntsman Packaging Corp. of Salt Lake City and New York-based consumer-goods producer Bristol-Myers Squibb Co.
Lyondell/Equistar, a $16 billion company, plans to use ECOutlook´s technology with its customers beginning this fall, said Jeff Hemmer, the companies´ vice president for customer supply chain.
"The Internet has given us the ability to get connectivity at a very low cost," Hemmer said. "But the real value comes with integrating the system so that inventory can flow automatically. I call it a hassle-free buying experience."
The chemical company will automate shipments coming to its 130 remote inventory locations, said Lyondell/Equistar logistics director Jerry James. Those off-site warehouses and liquid storage terminals will be electronically contacted when an order is placed.
"We need to plan about six months in advance for shipments," James said. "With this system, we can eventually drive it down to days or even hours."
But to get to that day means giving up some control. Web-based orders first pass to ECOutlook, headquartered in Houston, where they are sifted, recoded and transmitted to Lyondell/Equistar for processing.
ECOutlook becomes the anonymous outsider pulling the strings, an e-commerce Wizard of Oz. The company filters data from a litany of software packages from different suppliers, transforming it into a common computer language in XML format.
ECOutlook has built 2,500 "data maps," the blueprint to translate data to the format of the company´s trading partners. It also uses the software and servers of several partners.
By doing that, it allows companies to cast a line to thousands of others in its daisy chain of suppliers. The site also can link to independent trading exchanges.
All of that cost Lyondell/Equistar no more than $250,000 to set up. ECOutlook then charges a monthly service fee, based on the number of trading partners and number of document types.
Hemmer at Lyondell/Equistar said his chemical company in the past has had to work with a diverse array of software packages from its suppliers.
"Like the United Nations, it´s so splintered that it´s hard to make progress," he said. "This is a much simpler approach. There´s no reason not to participate."
Yet, some competitors believe the loss of control is a major reason not to join ECOutlook´s party. Raleigh, N.C.-based Haht Commerce Inc. is one, citing the need for companies to preserve their privacy instead of using a middleman.
"Most managers don´t want to turn over all their clients to ECOutlook," said Haht Vice President Sam Bayer. "Instead, they´d like a private marketplace, sponsored by a single seller and with customers coming into their system by invitation only."
Haht and others create Web-hosted applications that companies use internally to drive order taking and fulfillment. One main Haht client is plastic-pipe provider Lamson & Sessions Co. of Beachwood, Ohio.
But ECOutlook´s central hub also absolves companies from the burden of translating documents, said Kim Knickle, research director with Boston-based consulting firm AMR Research Inc. Other systems, especially the long-available electronic data interchange, or EDI, can be unwieldy, Knickle said.
"Unless you send a purchase order in a certain form, it´s not recognized," Knickle said. "Colors and seals are wrong, and you can´t determine if the order is for a quantity of one or for one entire box."
ECOutlook has some significant fence posts supporting it, including Rockefeller money and some plastics industry heavyweights selling its services.
Gardiner, a former distributor, and Brackeen, a former Exxon Chemical Co. executive, have 60 years of experience in the plastics industry between them. Gardiner said the company will offer a way in the door for small to midsize processors.
"This system provides an easy way for them to just get connected without the costs being prohibitive," said Gardiner, an ECOutlook sales director. "You use it when you need it, and all you have to do in log in."
Company computer systems — including consulting fees and setting up plant location — can vary from $10,000 to more than $1 million, said ECOutlook spokesman Jeff Byron.
So far, only a few competitors have entered the field of Web-hosted ordering, said Knickle at AMR. But others could join, she said.
The company has courted financial opportunities to gain an early edge. In late August, a fourth round of funding generated a $25 million investment from a group led by Menlo Park, Calif.-based Venrock Associates. It will help the company grow globally and add 30-40 people to its 105-person staff, said Venrock general partner Tom Frederick.
Venrock, founded in 1969, has put seed money into Apple Computer Inc. and Intel Corp. The firm is a successor to a Rockefeller family investment group.
"I don´t believe anyone is taking the same approach as ECOutlook, where they don´t force companies to buy software," Frederick said. "If they end up profitable, I wouldn´t be surprised to see an (initial public offering) some day."
Paat, meanwhile, said he expects ECOutlook to generate close to $20 million in sales next year and become profitable. Current sales were not disclosed.
The company was started by eight founders who began selling the service in July 1999. It got off the ground when two industry Goliaths, Bristol Myers-Squibb and Ciba Vision Corp., enlisted in the service, Paat said.
The company works from dual locations, with Chairman and Chief Executive Officer Mark Kingston in Houston and Paat in central Ohio.
Large companies want their smaller suppliers to use ECOutlook´s approach. Both BASF and Lyondell/Equistar plan eventually to use the system extensively with their stable of suppliers.
BASF will use ECOutlook to automate electronic purchase orders, allow customers to trace shipments and plan future materials purchases, said Paul Devoy, manager of trading partner integration for BASF´s logistics unit.
"The technology employed by ECOutlook makes it easier for BASF to connect with a greater number of trading partners in a shorter period of time than before," said Devoy in written answers to an interview request.
The use of e-commerce for the supply chain could be its greatest strength, said business e-commerce analyst Steven Kafka of Cambridge, Mass.-based Forrester Research Inc.
"Trading marketplaces will be a significant part of online trading but they aren´t the whole story," Kafka said. "Solving supply issues could be where the real value lies."