Cisco, Microsoft Work on Brazilian E-Commerce Initiative

Cisco, Compaq and Microsoft are all working with Brazilian firms Interchange and Módulo to
provide integrated solutions to cut costs and lead times in the deployment
of e-commerce operations in Brazil.

Known as the Value Chain Alliance, Microsoft, Cisco, Compaq, Interchange and Módulo plan to work in the deployment
of business-to-business e-commerce solutions. The Value Chain Alliance will
operate in a market that has generated US$100 million in the country in
1998, and is already working for 12 customers. Value Chain Alliance’s
goal is to work for some 20 customers within the next 12 months.

To form the Value Chain Alliance, the five corporations are each investing US$300,000 to train partners and create training centers in electronic
commerce. The name of Value Chain Alliance’s first customer will be
disclosed this quarter, and other clients include 10 large retailers and 150

Pedro Donda, managing director at Interchange, said that
“corporations have US$300 million to invest in business-to-business
e-commerce in Brazil this year.”

According to Jaime Araújo, strategic alliances director at Módulo, Value
Chain Alliance’s customers’ major benefit will be the faster deployment of
e-commerce systems. The Alliance is interested in cars, food, retailer,
medicine and insurance industries, mainly. To Donda, the alliance idea puts
an end to the scenario in which the customer has to create or develop his
own e-commerce system structure, buying resources from different vendors.

According to Sérgio da Costa Murollo, strategic alliances manager at Cisco,
it’s possible to cut costs in 80 percent in the transactions among customers and
vendors, using an e-commerce solution over the Internet, and the payback is
possible in 6 months. Before deploying the business-to-business e-commerce
system, Cisco spent US$125 at each operation, and now it amounts to
less than US$5. “With the new system, Cisco saved US$550 million in 1998,”
said Murollo.

According to Alexandre Pombo, e-commerce manager at Microsoft, the initial
cost of a business-to-business e-commerce solution is US$60,000, and
includes Compaq servers, Cisco routers, Microsoft platforms, security
consultation by Módulo and electronic community management by Interchange.

“It’s a scalable solution and it may be expanded to customer needs,” said
the Microsoft executive.

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