This is a bit dated, but it is acts as a good introduction to the company. Needless to say, their client list has grown extensively since this time.
Web Company Helps Computers Do Business With Each Other
By Andrea Petersen
06/03/1999
The Wall Street Journal Page B7 (Copyright (c) 1999, Dow Jones & Company, Inc.)
It isn't as sexy as Internet centerfolds Amazon.com Inc. and eBay Inc., but webMethods Inc. is gunning to be an electronic-commerce powerhouse.
webMethods produces software that helps companies do business with their suppliers and customers over the Internet. It is one of a myriad of companies hoping to cash in on what some view as the holy grail of e-commerce: the business-to-business market.
webMethods' goal is to make its software part of every one of those lucrative transactions. While the company won't comment on its future plans, its backers believe that Wall Street may soon be ripe for initial public offerings from business-to-business e-commerce companies like webMethods.
The Fairfax, Va., company, founded by Australian immigrant Phillip Merrick, has cultivated a number of high-profile customers, including Dun & Bradstreet Corp. and FMC Corp. It has also raised about $22 million from investors such as Goldman Sachs Group Inc., Mayfield Fund and FBR Technology Venture Partners LLP, a division of investment bank Friedman, Billings, Ramsey & Co.
webMethods' software solves a critical problem for companies wanting to do business over the Internet. Many have proprietary back-office software systems that don't easily "talk" to each other. The webMethods technology allows companies to exchange key bits of data, such as inventory information, pricing and delivery status, regardless of the type of computer systems used.
The software rides on a computer language called XML, or eXtensible Markup Language. XML, which has been adopted by a computer-industry standards body, is a way of identifying bits of data. It works like this: If a company sends a purchase order to a supplier for a shipment of sneakers, XML will place a tag that identifies the different bits of information on the form, such as the price of the product and the quantity desired.
When the purchase order flies through the Internet and into a supplier's inventory system, the XML tags allow the computer to identify which bit of information in the sea of data is the price and which is the quantity. The software then allows the supplier to track the order through its journey, similar to the way scientists use radio tags to track migrating birds.
webMethods' software acts as a sort of an escort, funneling information from a customer's internal computer system, converting it into XML, sending it across the Internet, and then converting it back into information that can be used by a supplier's computers.
Dun & Bradstreet was one of webMethods' first big customers. The compiler of financial and credit information uses the webMethods technology to help it integrate data it housed in a number of regional mainframe computer systems. Customers would get their information through proprietary networks hooked up to these mainframes.
The problem was that none of these proprietary systems could share data. So if a customer wanted both U.S. and European credit information, it had to get it from two sources.
Dun & Bradstreet first started working on its own solution. But last August, the company hired webMethods to help integrate its computers. Tom Gwydir, the director of Internet development at Dun & Bradstreet, says the software has performed well and also saved Dun & Bradstreet money.
FMC Corp. a chemical manufacturer, is using webMethod's software to exchange information with the railroads it uses to haul its products to its customers. Previously, all of the shipping information was locked in FMC's computer system. A customer that wanted to locate its shipment of soda ash, a key ingredient for glass, would have to call FMC and have one of its employees search its database to find out the status of the order. Worse still, the data was often a day old. Now, through the use of webMethod's software, customers can pull up a Web site and see exactly where their order is. Information is updated five or six times a day.
webMethods is also doing deals to have its software embedded into the big computer systems that large corporations buy. So far, SAP AG and Ariba Inc. have agreed to embed webMethods into their corporate software. And last month, webMethods announced a partnership with Microsoft Corp. in which webMethods' software will allow Microsoft customers that use Microsoft's BizTalk framework to exchange documents with companies that have different computing platforms.
webMethods faces plenty of wellfunded competitors. Extricity Software Inc., Redwood Shores, Calif., has raised $25 million from investors, including Intel Corp. OnDisplay Inc., San Ramon, Calif., has attracted some large customers.
webMethods' softspoken founder, Mr. Merrick, immigrated to the U.S. 10 years ago "with two suitcases and about $1,500," he says. After years of working as a software engineer at Australian companies, he decided to move to the U.S. to launch a start-up. "It is much more difficult to do a software company in Australia," he says. "Venture capital isn't readily available. Your major market is the U.S., and it is 14 hours away."
Mr. Merrick, 36 years old, settled in Virginia because he had friends there, and worked for a couple of computer companies before striking out on his own. "When the Internet wave started to hit big in 1995 and 1996, I realized that it was pretty much now or never," he says. Mr. Merrick started working on software and a business plan in his basement.
Mr. Merrick bumped into Tim BernersLee, who created the Web, at a conference. Mr. Merrick told Mr. Berners-Lee what he was working on, and he suggested that Mr. Merrick build his program using XML, a new computer language that Mr. BernersLee was developing.
It proved a hard sell with potential investors. "At that point nobody had heard of XML, and the whole idea of using the Web in this way was something that seemed pretty goofy," says Mr. Merrick. But things changed in late 1997, as XML started to get more exposure. webMethods landed its first round of funding, $3.6 million, in the fall of 1997.
These days webMethods is busy signing up new customers and acting as an evangelist for XML.
"The utilization of XML in business-to-business e-commerce is a 1999 phenomenon," says Laurie Orlov, a senior analyst at Forrester Research Inc. in Cambridge, Mass. "It will become commonplace by next year. webMethods is in a big growth area."
All the Best
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