LOS ANGELES, May 12, 2000 (BUSINESS WIRE) -- Vertical Computer Systems, Inc. (OTCBB:VCSY):
Vertical Computer Systems, Inc. (OTCBB:VCSY), a leading multi-lingual portal provider, software developer and e-commerce solutions company, today announced that it entered into two joint venture agreements with iNetPurchasing.Com, (iNPi) a private company that develops online procurement services for state and local governments.
VCSY also made a cash investment in iNetPurchasing.Com, the amount of which was not disclosed.
In partnership with SYSCOM Inc. of Baltimore, Md., iNetPurchasing.Com has been selected to provide Internet-based purchasing services for the state governments of Texas, Maine and Idaho. Efforts to capture more state contracts, and to add county and city governments to its client list, are underway.
Terms of one agreement call for iNPi to market VCSY's existing and developmental product bases to state and local governments as part of its comprehensive e-solutions bundle. Among those products is the Markup Language Executive Framework (MLE), often simply called Emily(TM). Proprietary to VCSY, Emily is a programming language that allows Web page builders to design Web sites that intercommunicate via XML and HTTP.
XML is the industry-endorsed format for business-to-business communication and is anticipated to be accepted for government-to- business applications as well.
The other agreement calls for VCSY to market iNPi's online procurement services internationally, targeting foreign governments in response to WorldBank, ExImBank and USAID requirements that recipient nations must implement modern procurement procedures before release of funds. VCSY will also target private companies internationally as well.
Richard S. Wade, president of VCSY, said: "iNetPurchasing.Com is the only company that's come up with an online procurement service to handle all aspects of purchasing transactions for the public sector market. Through strategic partnerships, iNetPurchasing.Com's solution handles everything from requisition to final payment, including a complete audit trail uniquely essential for governmental processes."
"Between 3% and 6% of a state's total operating budget goes to purchasing processes," said Basil S. Nikas, iNetPurchasing.Com's CEO. His company has developed an Internet business model and technology that increases efficiency and lowers expenses of current public sector purchasing processes both for the buyer and the supplier.
"In the last three years, state and local government officials have realized the need for a major overhaul of one of government's costliest and most critical operations -- the purchasing process," Nikas said. "In resounding affirmations, these officials are looking to Internet-based solutions to create the urgently required paradigm shift."
Nikas also noted that the targeted market includes 89,000 units of state and local government, public educational institutions and special purpose agencies or authorities like port or transit authorities, utilities and water districts.
Nikas continued: "Government purchasing agents are relying on paper-based catalogs or blanket purchase order documents to begin a time-consuming process that requires repetitive input prior to release to a vendor -- a process that inefficiently consumes time better spent on negotiating contracts and building stronger G2B relations.
"There is approximately $235 billion dollars being spent per year by the 150 largest entities. Industry analysts estimate the market availability to be in excess of $3.5 trillion by 2001. While 20% of that spending is on large public projects, 80% is on commodities, things those governments use every day."
In 1999, Request for Proposals (RFPs) for "Statewide, Internet-based Procurement Solutions" were issued by Arizona, Idaho, Texas and Maine. Each one specified that a) the system must be Internet based, b) ready for implementation (not design and build), and c) there were no funds allocated for these contracts and that the responding vendors must indicate a financial model for cost recovery. Hence, a paradigm shift to shared risks through public private partnerships.
As of March 6, 2000, the iNetPurchasing.Com Team has successfully won competitive bids for statewide e-procurement systems. The states of Idaho, Texas, Maine and Arizona (Phase 1) selected the iNetPurchasing Team government to business (G2B) service over dozens of business to business (B2B)-based solutions. Competitors included Ariba, CommerceOne, SAP, Anderson Consulting and others.
The conservative Net Present Value of these awards is estimated at $3 million to $9 million per year in value-added, transaction-based revenues. Installations have already commenced in Idaho and Texas with Maine commencing in June. In less than 8 weeks, Texas issued its first electronic purchase orders.
Earlier this week, VCSY announced its purchase of Globalfare.com, an Internet-based travel reservation site it plans to develop into a leading online guidebook for travelers. Brazil will be featured first, followed by China and other nations. All content is planned to appear in the language of the host nation, as well as in English.
VCSY also launched a Portuguese-language portal in April, the BrazilBridge.com, (www.thebrazilbridge.com), in a style similar to its first foreign site, the ChinaBridge.com, (www.thechinabridge.com).
iNetPurchasing.Com, based in Bethesda, develops Internet-based procurement services designed specifically for the unique nature of public sector purchasing in the state and local government arena. The state governments of Texas, Maine and Idaho have selected its unique technology to meet their statewide purchasing needs.
VCSY is a leading multi-lingual portal provider, software developer and e-commerce solutions company based in the United States. The company provides a full range of Internet services that include building e-commerce solutions nationally and internationally, distributing content via multi-lingual portal networks (www.thebrazilbridge.com) (www.thechinabridge.com), and Internet services (www.thepostmaster.net).
Through its wholly owned subsidiary Externet World Inc., the Company provides online shopping services (http://www.shoppinginternet.com). The company is also a leading developer of proprietary software for the Internet: the Emily (MLE) Framework, a programming language that enables the creation of Websites that intercommunicate via XML and HTTP; and online gaming software (http://www.ccpsoftware.com).
For more information, visit the company's Website at www.vcsy.com.