SARA FISHER
Staff Reporter
When it comes to Internet commerce, software companies all seem intent on one thing: dominating the market with a foolproof program for online retailing.
But while there’s clearly a demand for product, there’s also one big problem: competition, and lots of it.
Take last week’s Los Angeles Internet Commerce Expo at the downtown Convention Center. Of the 150 tech companies participating, more than half were hawking similar software products designed to take care of a merchant’s every need in facilitating online sales.
“It’s like walking down the cereal aisle at the grocery store,” said Bill Manassero, executive director of the Software Council of Southern California, which had a booth at the Expo. “There are only slight twists to some of the products, and the others are incredibly alike. The next step for this early market will be a wave of mergers and acquisitions.”
Participants at the Expo said they were aware that consolidation will soon sweep their industry. But most seem to think it’s the other companies that will fall by the wayside.
“We think we have the sweet spot in the market,” said Craig Froelich, senior sales engineer for Torrance-based Webvision. “There’s no doubt that there is going to be a huge shakeout, and I think we’ll see the small companies gobbled up in the next 12 to 18 months, so we’ll obviously see how we do sooner rather than later.”
Webvision’s pitch: software components that can be mixed and matched. Froelich said that his product gives companies doing e-commerce more flexibility, especially those that cannot afford completely customized software.
Across the Expo floor, Donn Montaya of Los Angeles-based InternetConnect figures that his company will flourish because it is selling service, not just software.
“All these companies are so similar that the person who provides the best service, not the best software, will win,” Montaya said. “In the end, this is a service industry, not just a tech industry.”
The sales force for Beverly Hills-based ComBill is touting another feature: payment options. Through ComBill’s product, merchants can receive payment for online purchases via six different types of credit cards, accept foreign currency even tack charges to the buyer’s phone bill.
“There is money to be made in this industry by the companies that have a good product and do good advertising to stand out from the crowd,” said company spokesman Alan Wallace. “ComBill should do just fine on both counts.”
Buried in a small booth among the crush of exhibitors, Long Beach-based Active Commerce Software emphasizes low cost and one-stop service.
“Our strength comes not from glitzy advertising but from our integration,” said company representative Bryan Lane. “We have the software, engineers and consultants all under the same roof and at an affordable price.”
Lane paused to watch a crowd gather around a competitor’s booth as it launched an elaborate multimedia presentation.
“This industry changes so fast, it’s absolutely cutthroat,” he said. “But by the same token, it’s an $8 billion industry and we’re only at the tip of the iceberg.”
Of course, a few companies might just sink.
“It will be interesting,” Lane said, “to see which companies come back for ICE ’99.”
