By JONAH GREENBERG
(Virtual China News, June 19) Viewlocity, a global business-to-business integration software company with over 100 clients in China, is trying to establish its proprietary software as a standard for linking incompatible computer systems in China's increasingly automated supply chains.
The Atlanta, Ga.-based company has been engaged in high-level talks with top officials at China's Ministry of Information Industry (MII). The ministry is considering the company's software as easily-monitored infrastructure for e-commerce in China, according Mikael Ahlund, vice president of global marketing at Viewlocity, in a phone interview from Atlanta, the company's global headquarters.
While Chinese companies and their trading partners enjoy faster-than-ever communication made available by high-speed private networks and the Internet, they also run into obstacles caused by the proliferation of incompatible computer systems. A new breed of companies like Viewlocity, which seek to bridge incompatible systems rather than convert users to new systems, could be big winners in China's emerging e-commerce revolution.
Strong Interest
"The MII wants to drive one approach to this diversity for electronic commerce in China," Ahlund said. "In essence, to pick a standard. We have gained the confidence on the government side, because of the fact that we have done so much work with the government ministries there."
According to Ahlund, Viewlocity executives have seen major interest in Vice Minister Lu Xinkui of the MII, who visited Stockholm in May on a quest for foreign business-to-business (B2B) and business-to-government (B2G) technologies.
"The reason for his interest is that he's trying to establish our software as China's infrastructure for electronic commerce," said Ahlund, adding that the MII is currently evaluating "AMTrix," Viewlocity's main product.
AMTrix, a hardware and software solution that helps different members of a supply chain communicate in a commonly understood messaging system, is already used by over 100 customers in China, including the government-backed China Ocean Shipping Company (COSCO), the company says.
Message Brokering
Nine of COSCO's regional locations throughout China have adopted the AMTrix solution, as well as the customs offices in the 15 largest ports in China.
The Ministry of Communications (MOC) has about 45 different Viewlocity "installations" for marine and highway safety, according to the company.
An AMTrix installation uses a hub-and-spoke model and functions as a message brokering platform, where private and public organizations can communicate with each other about the whereabouts and details of shipments regardless of whether they use a Unix system or a mainframe, a powerful computer that accomodates a large number of users within an organization. Their technology makes use of XML, or Extensible Markup Language, a Web formatting system akin to the Hypertext Markup Language (HTML) that is currently used to write most Web content.
Ahlund feels confident the MII will endorse Viewlocity's product, considering the way business decisions are influenced by government officials.
"The connections between top business and top government is very strong in China," he said, pointing out that many of the top businesses there are state-owned.
Rapid Automation
The proliferation of new channels of communication, such as the Internet and private networks, has long been identified by the MII and other government agencies in China as a powerful tool to modernize and upgrade the country's prospects in the global economic community.
"I think the leadership and the government understands that unless they very rapidly automate big segments of their industry, they will not be able to stay competitive," Ahlund said. He added that Viewlocity, which enjoys a strong customer base in Europe with such clients as Ericsson, Siemens, and Volvo is interested in China because many of the world's supply chains start there.
Viewlocity gains revenues through licensing its products and by charging for its services. Companies can be charged on a usage model, meaning they do not need to purchase Viewlocity's software and hardware outright, but can be charged based on how much they use the service.
B2G Potential
Viewlocity forged an alliance last month with China Information Highway, a leading Internet service provider (ISP) in China. Also last month, the company's AMTrix product was chosen by the China Association of Environmental Protection Industry (EPI), which will use the software to build a B2G (business to government) marketplace for environmental government contracts.
The EPI will create a trading exchange for domestic environmental contracts that will be awarded by public agencies to Chinese and foreign companies.
"B2G is a business area that we don't see too much of in this part of the world," Ahlund said, adding that countries like Sweden and China, have a much higher level of government involvement in industry than in U.S.
Viewlocity will soon open a Hong Kong office that will add to their Asia Pacific presence, which currently consists of a Beijing office with 30 employees, and Singapore, Sydney, and Melbourne offices. The company employs 400 people worldwide.
Competition in Europe
One difficulty of working in China is the shortage of qualified employees, Ahlund said. "Just like the U.S. in the high-tech arena, it's a tight labor market," he said.
Viewlocity broke off from the Swedish IT company Frontec AB, in March of last year. While it has plans to go public, the company still operates on a sum of US$39.8 million of venture capital provided by Battery Ventures, BCI Partners, BancBoston Ventures, the Beacon Group, and CommVest LLC in two rounds of financing.
In Europe, Viewlocity faces competition from software company Neon, but according to Ahlund, the company does not "run into any of the competitors in China that we see in other parts of the world."
To reach Jonah Greenberg email: jgreenberg@virtualchina.com
