Contract Journal (14 December 2000)

Mercadium deals fortify e-security

Internet trading site Mercadium works with software groups such as BIW that have already developed robust systems. By John Leitch

Internet trader says it is set to be the industry's safest e-commerce website

Mercadium is about to unveil two software partnering deals that will make it the construction industry's safest e-commerce website, said Mercadium director Emma Welsh this week.

"Security is a major issue. There are differences between the various business-to-business players. They aren't all the same - and ours will be better," Welsh said. "Other platforms have shown that they may be okay on a low number of users, but when they scale up they crash. There are differences in robustness."

Welsh said Mercadium had chosen to partner with software groups that have already developed robust systems for protecting the transfer of funds.

Mercadium is an internet trading site set up by a group of eight senior players in the construction industry, the list of names including Aggregate Industries, Alfred McAlpine, plasterboard manufacturer BPB and the ready-mixed concrete group RMC. The founders have raised £3m so far to get the site up and running.

Mark Oliver, the MD of Build Online, a rival B2B website, recently criticised e-commerce marketplaces founded by industry heavyweights for their lack of software tools and capital.

Welsh said: "We have chosen a different approach [to BuildOnline]. We don't develop software, rather we customise existing software. Our is the partnering approach. For instance, Oracle has an existing auction package that only needs to be tweaked for construction industry use. Other websites have thrown much more money into developing their own system but have virtually nothing to show for it."

Mercadium has recently announced deals with the Stationery Office, enabling it to offer Building Regulations on-line and with the Building Information Warehouse, which provides project collaboration software.

Welsh said: "BuildOnline is attacking a small part of the market. It has taken a different approach, developing software all itself, which costs a huge amount. It is an approach that is less robust and secure."

The other leading construction B2B player eu-supply.com has focussed on auctions, Welsh said, adding: "It won't give any other functionality."

Looking ahead, Welsh anticipated a radical shake-up in the plethora of competing e-business websites for construction. Eventually there will be just two or three big ones, she said, plus a lot of small niche players.

In the three months since signing a partnering deal with the Stationery Office, Mercadium has attracted 400 subscribers to the service. "In 12 months' time I'd expect numbers to be ten-times higher", said Welsh. The fee is £350 per year. By the end of December, subscribers will also be given access to health and safety legislation. In a separate development, Mercadium plans to offer live trading next February.