Companies stranded when suppliers close doors.
With the frequency of technology companies announcing lowered earnings expectations, major layoffs and dead-in-the-water business deals increasing, it almost comes as no surprise when a company announces it is going out of business.
When that company was a provider of business-to-business e-commerce technology, the effects of its closing can ricochet through its customer base as quickly as a virus on the Internet.
Such was the case with Time0, which offered products, services and consulting for order and acquisition marketplaces, bid-ask systems, and auction sites. The Cambridge, Mass., company quietly closed its doors earlier this year when its parent company, Perot Systems Corp., folded Time0 into its business consulting group as part of an overall restructuring plan.
Time0s divisions, including MarketCap and SkyIron, now exist only as technologies within the newly reorganized company, said officials at Perot, in Plano, Texas.
Danielle Hampson, president of KDResources Inc., in Scottsdale, Ariz., wasnt too happy to learn of Time0s untimely demise. Hampson was a beta tester for SkyIron, which offered hosted e-commerce functions such as searches and auctions for vertical-market exchanges. SkyIron had launched late last year.
"I was ticked off when I found out about it," Hampson said.
KDResources Web site, Stonesoft.com, is a vertical portal for the commercial stone industry. Hampson had used SkyIrons search feature on Stonesoft.com and had planned to implement an online auction with SkyIrons help. But after she heard through the grapevine that SkyIron was closing (she wasnt formally notified until late last month), Hampson abandoned her plans. "I was very disappointed that they dropped the ball because I really thought they had something going," she said.
The results can be equally unsettling when a B2B e-marketplace closes shop. Tri-anim Health Services Inc., a large supplier of specialty products for respiratory, anesthesia and critical care, found itself scrambling when its B2B marketplace, Promedix.com, went out of business in January. Promedix, a marketplace for the health care industry, was a subsidiary of Chemdex, which itself ceased operations on March 31.
Tri-anim was among Promedixs first trading partners and also acted as its distribution and shipping arm.
Despite early warning signs of a shaky dot-com market, Tri-anim officials were confident that Chemdex would stand behind Promedix until it was able to reach profitability, according to Tri-anim Marketing Manager Mark Conner.
Danny Costello, IS manager at Tri-anim, of Sylmar, Calif., worked on a two-month installation to integrate his back-end system with the Promedix trading platform.
While Tri-anim has since integrated five additional exchanges, Costello has been unable to reuse any of the technology developed in the Promedix implementation.
"Since it was purchased through [Promedix], they are the true owners of the license," Costello said. "We now have a piece of software here that were not using, so we did have to restructure some things." On the flip side, losing Promedix was not so bad for those of his customers whose businesses were not ready for B2B technology, he said.
Tri-anim had about three weeks notice before Promedix shut down. That was enough time to shunt any mission-critical functionalities from the site and deal with leftover inventory, Conner said.