Intel pushes $5bn in transactions through RosettaNet trading hub

More than 10% of Intel's customer and supplier transactions were executed through the RosettaNet Internet exchange standard in...

More than 10% of Intel's customer and supplier transactions were executed through the RosettaNet Internet exchange standard in 2002, a total of about $5 bn.

RosettaNet is a standard based on XML for business-to-business e-commerce transactions within the semiconductor industry. It allows a company's suppliers and customers to buy and sell products electronically without the need to set up electronic data interchange (EDI) links or depend on paper orders, said Chris Thomas, chief strategist for Intel's solutions markets development group.

By using RosettaNet, Intel can receive electronic orders from smaller suppliers that previously could not afford to set up EDI links, Thomas said.

More than 90 companies are now trading with Intel through RosettaNet, which resulted in 10 times the number of customer orders and five times the number of supplier transactions in 2002 compared with 2001.

EDI links have limitations, said Jon Derome, senior analyst at market researcher firm Yankee Group. XML-based systems, however, allowed companies to use standard methods to integrate their systems rather than just exchange data.

"EDI defines a document, its an electronic representation of a purchase order or invoice. It's very effective for sending documents, but you can't add process intelligence," he said. With the XML-based RosettaNet system, Intel can send an inventory request to one of its suppliers, and set responses based on the result of that inventory request.

If Intel needs 500 units and the supplier only has 300 units in stock, RosettaNet can define how quickly Intel needs to fill its request, and how long it can wait until the supplier gets more units in stock. EDI links send the data back and forth, while the XML-based process can determine the best course of action through predetermined variables.

Companies can purchase RosettaNet gateway software from about 13 vendors, such as Tibco Software or Iona Technologies, among others. The cost of software can range from about $10,000 to several hundreds of thousands of dollars depending on the size of the company.

RosettaNet reduces the time to process orders from a day for paper orders to less than an hour.

Intel was an original member of the RosettaNet consortium, formed in 1998. Over the past five years the consortium has slowly grown from its first connection between Intel and Arrow Electronics, an electronic component manufacturer, to the 90 partner companies connected. About 30,000 transactions a month are now executed over the RosettaNet standard.

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