One Click To Buy a Billion Light Bulbs?

Inside the MRO Closet... The recent press announcement of Octane's $30 million investment in SiteStuff.com is just the tip of the iceberg in the building supplies and procurement arena. Over the next few weeks, it is likely that the two other commercial alliances, Project Constellation and the Office Technology Consortium, will be making selections for their preferred online platform for facilities procurement. Together, these two consortiums of institutional and REIT property owners control close to a billion square feet of offices, apartments and shopping centers. The $200 billion marketplace for maintenance, repair, and operations (MRO) of real estate products is one of the easier points of entry given the low risk proposition of buying light bulbs, janitorial supplies, and tools over the Net.

Who are the dominant players? The competitive field includes the aforementioned SiteStuff.com, FacilityPro.com, ebuyXpress, OpsXchange.com, PhatPipe.com, PropertyOps.com, TenantTools.com, and a new entrant, PurchasingCenter.com. These sites are seeking to improve pricing and procurement efficiencies for facility and property management professionals on an enterprise-wide basis. Integral to these business models are customer-centric systems that help organize, track and plan expenditures.

Do these online companies really expect your average field engineer to beam their orders via a Palm Pilot or laptop computer? Reed Stvan, VP of Business Development and Strategy for FacilityPro.com, offers this insight: "No, FacilityPro provides multiple access points via telephone, facsimile, e-mail or pager -- for both regular and emergency orders. The 5 to 20% of procurement cost savings results from first completing a comprehensive review of a property owner's buying behavior and then implementing a customized purchasing plan." Clearly, to succeed these sites will have to make ordering follow the path of least resistance.

--Eileen / ecirco@pikenet.com

(Note: The From field above has been changed to an automatic mailbox. So please send replies to me at ppike@pikenet.com or Eileen Circo at ecirco@pikenet.com.)