ALBERTSON'S EXECUTIVE: B-TO-B EXCHANGES NEED TIME

DAN ALAIMO

PASADENA, Calif. -- The hottest topic in the Internet business-to-business world these days is whether public or private exchanges will eventually win out. But Patrick Steele thinks that is the wrong question at the wrong time.

"My only response to this is, why don't we let the exchanges get functional?" asked Albertson's technology chief during the Supermarket News/Executive Technology Summit on Internet commerce here last month.

"Let's see what real business will come out of the exchanges and then we can answer this question, because we've got a lot of theory going on right now," said Steele, who holds the title of executive vice president, information systems and technology. Albertson's was one of the founding companies of the WorldWide Retail Exchange, Alexandria, Va., and Steele has been actively involved in promoting it.

Speaking of the other big food and retail exchanges, he noted that he was prohibited from talking to the GlobalNetXchange, San Francisco, by the Federal Trade Commission.

Steele said he is also limited in his dealings with Transora, Chicago.

"But it's easy to predict what WWRE is thinking, it is very similar to what Transora is thinking, and that is very similar to what GNX is thinking," he said.

And that is that the public exchanges will be used by their members as private exchanges at times, he said.

For example, Albertson's might be working on a collaborative promotion with a packaged goods company using WWRE "and nobody else will be able to see that information. These will be private transactions secured on the Internet with all the tools we have," he said.

"There will be other times when we will want to do a collaborative auction, or collaborative buying on product that is indirect, to run our business, and it is OK by all the rules to treat it as a public exchange. So the exchanges have to have that flexibility," Steele said.

"So the question is not whether it is public or private, but it is how you are going to use it. And I think we have to wait another year to see how all these exchanges sort out, how they are used, and see how this whole thing goes," he said.

Posing the question of whether a company should join an exchange, Steele said, "The answer shouldn't be yes or no. The answer shouldn't be if, but how."

Some have speculated that the e-market phenomenon may be just a two-year cycle, he said.

"It's going to be over before most of you get started. So pay attention to that and worry about that. Those companies that want to totally embrace the changes that are going to occur from a total company perspective, and that are willing to put forth the effort to understand it and move forward, those are the ones that will be successful," he said.