Exostar Soldiers On, Despite CEO's Departure

Despite the abrupt departure of CEO Andy Plyler last week, Exostar is proceeding apace, according to CFO and acting CEO Ken Possenriede. Despite Plyler's defection, Rolls-Royce still proceeded to become the fifth partner in the aerospace and defense e-commerce business, joining BAE Systems, Boeing, Lockheed Martin and Raytheon.

"When [Plyler] left, we had to disclose that fact to Rolls," who hadn't yet signed on to the company, Possenriede says. The engine OEM had a list of criteria that had to be met by whatever e-commerce exchange it might choose, "and one such item was that there had to be a CEO on board. But Rolls saw that our top team of executives is on board, in spite of his leaving.

The company launched its first indirect-procurement (that is, items that are not directly used to keep an aircraft or defense system operating) application in September 2000, and processed its first transaction -- a batch of Exostar pens -- shortly thereafter.

It has taken much longer to build a direct-procurement application that launched in June. "We had to configure that system to support [military] aerospace and defense activities," says Possenriede. The standard purchase order for a military transaction has nearly double the number of spaces to be filled with information over a civil transaction, from 28 to 54.

Technologically, the site is undergoing a transition to an IBM hosting service. The site has functioned until now on a system hosted by Commerce One, which has served as a technological consultant to the company since the beginning. "IBM offers a more robust solution," says Possenriede. "And it operates on a much more international level. Most of the work we do with BAE is in the U.K., and we've added Rolls, which is a very U.K.-centric company.

Possenriede says that a main priority for the company is to tie the 40,000 suppliers to the five prime-contractor Exostar partners into the system. Since the direct-procurement package was launched, 10% of that supplier base has signed up. The company's goal is to have 25% on board by the end of the year.

Does that mean that there's a problem with resistance to the sales pitch among these suppliers? "Oh, no, it's a matter of educating them," says VP communications Ludo Van Vooren. Suppliers who haven't signed up will be much more willing to do so when they see how the company can cut transaction costs and increase visibility, he says.

Though the Exostar executives say the company is still interested in having end users such as airlines and other operators use the system, it also has built in a module that can connect its exchange to another exchange. "We could, for example, link Aeroxchange, with all its airline partners, to Exostar, and they can bring the airlines and we can connect them to suppliers," says Van Vooren. "It's like when I call the U.K. from the U.S. I use an AT&T phone to connect to a British Telecom phone, but I don't have to worry about them communicating."

The company has adopted XCBL 3.0 as its XML language standard. "Now that we have picked an XML standard to work with, we can talk to Spec 2000 or do electronic data interchange," says Van Vooren. "Now we want the others to choose theirs. As long as they choose an XML-based system we can talk to them."