FedCenter, Tech Data Join Hands

FedCenter, Tech Data Join Hands

By Bob Starzynski
Staff Writer

Buoyed by a major distributor partnership last week, online procurement forum FedCenter is on the hunt for other alliances as electronic commerce blossoms in the government buying world.

A marketing agreement between the two-year old Internet service and Tech Data Corp. of Clearwater, Fla., gives FedCenter's virtual mall for government buyers an additional 80,000 product offerings, said officials with Reston, Va.-based Digital Commerce Corp., which runs the online procurement forum.

FedCenter, which allows government employees to browse and order almost any technology product over the Internet, will now list over 350,000 products on its site, Digital Commerce officials said.

"Tech Data will be marketing us to their vendors," said Richard Graveley, executive vice president and founder of Digital Commerce. "This is a very big deal for us."

Headquarters: Reston, Va.

Parent Company: Digital Commerce Corp.

Founded: November 1995

FedCenter President: David Beers

DCC President: Tony Bansal

Web Site: www.fedcenter.com

In its fiscal year ended in January 1997, Tech Data posted revenue of $4.6 billion. The large distributor of technology products in the government market has 5,000 resellers channeling their sales through the company.

FedCenter, which lists products from the General Services Administration's schedule and other procurement vehicles, also generates revenue when vendors set up "FedSites," or individual home pages on the FedCenter site. Digital Commerce Corp. does not release any financial information on FedCenter. However, Graveley points to the potential of the company's market and recent federal government mandates that urge government purchasing be done electronically.

The FedCenter deal gives Tech Data a new way to generate business without side-stepping its resellers, Graveley said. And FedCenter gets a bigger library of products to attract the government buyer. The online service touts more than 30,000 subscribers and 50,000 hits a day to its Web site. But most of FedCenter's products, to date, have been offered through vendors without connection to their distributors.

"We plan to sign on with other distributors [like Tech Data]," said Graveley, who would not name any such companies. Other large distributors in the government market include Ingram Micro of Santa Ana, Calif., Merisel of El Segundo, Calif., and MicroAge of Tempe, Ariz.

Other possible deals for Digital Commerce Corp. include working with other independent online services, such GovCon Inc. in Rockville, Md., and eFed, a service of Electric Press in Reston, Va. While these services all vie for the same audience, they also complement each other.

"GovCon attracts attention because it offers the [Commerce Business Daily]," Graveley said. Commerce Business Daily is a government publication that lists all government contracting opportunities over $25,000 for every federal agency.

Meanwhile, last fall, FedCenter reached another milestone when it won a five-year research and development agreement with the Defense Information Systems Agency, an arm of the Department of Defense that does all of the agency's electronic commerce buying. While that agreement did not carry a price tag, it got FedCenter its first deal with a government agency. In fact, it was the first deal between any such online service and a government agency.

Graveley said the DISA and Tech Data deals are just the beginning.

Also on the burner is a potential deal with FedCast, a "push" technology service that was jointly developed by Fairfax, Va.-based integrator BTG Inc. and PointCast Inc. of Sunnyvale, Calif. Online push services bring information to the user, rather than making the user seek out the information. Because BTG owns a minority stake in Digital Commerce, there is a possibility that FedCast, which supplies contract information but no purchasing capability, and FedCenter could unite.

"There is a strong incentive for us to work together," said Paul Collins, group vice president of BTG. "We have had preliminary talks with them about putting our 'push' to FedCenter."

Graveley said that such a marriage would be a beneficial way to build additional support for FedCenter. But, he added, "push" technologies require a lot of computer memory from the government computer user and most government users currently don't have that memory to spare. "That may still be a little ways off," he said.

Dheeraj Khera, president of GovCon, said he talks to other companies in his market regularly but would not address the likelihood of a merger between FedCenter and GovCon. But, "there is probably going to be a shakedown over the next couple years in this business," he said. GovCon has grown to 80,000 subscribers since it was founded two years ago and is profitable, Khera said.

GovCon is aimed more at the government contractor audience than the government employee audience, Khera said. "In that way, we do complement [FedCenter]."

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