September 4, 1998
PCORDER.COM INC (PCOR)
S-1 Filing (SEC form S1)
pcOrder is a leading provider of Internet-based electronic commerce solutions that enable the
computer industry's suppliers, resellers and end-users to buy and sell computer products online. The
Company's solutions are designed to increase the efficiency and effectiveness of the sales, marketing
and distribution of computer products and to enable members of the industry to take advantage of
the increasing adoption of e-commerce. Forrester Research estimates that the business-to-business
e-commerce market will grow from $8 billion in 1997 to $327 billion by 2002. In addition,
Forrester also believes that computer products is the largest and fastest growing segment, by
revenue, in business-to-business e-commerce. The Company's comprehensive offering consists of
software applications and content databases which enable industry participants to buy and sell
computer products online by increasing the automation product search, comparison, configuration,
pricing, financing, ordering and reseller selection. The Company believes it is uniquely positioned to
deliver these solutions through its: (i) ability to deliver a broad set of advanced front-office and
e-commerce software applications, including configuration and pricing; (ii) position as a leading
content provider of computer product and compatibility information; and (iii) experience in
delivering industry-specific functionality and integrations into business systems of computer industry
participants. The Company's solutions have been adopted by market leaders including Bay
Networks, Compaq, CompuCom, Computer City, CMP Publications, GE Capital, IBM, Ingram
Micro, Kingston, MCI Systemhouse, MicroAge Integration Company, PC Wholesale, Pinacor and
Tech Data. In the 12 months ended June 30, 1998, over $3 billion of quotes for computer products
had been generated using the Company's solutions, representing use by more than 3,500 sales
representatives from over 500 resellers. The Company's revenues have grown from $3.7 million in
1995 to $10.6 million in 1997, and were $9.6 million in the first six months of 1998. The Internet
and Internet-related technologies are revolutionizing the way businesses and consumers
communicate, share information and conduct business. Businesses are increasingly replacing
paper-based transactions and communications with e-commere solutions in an effort to reduce
costs, decrease inventories and shorten time-to-market. The Company believes that the computer
industry is particularly well suited to the use of Internet-enabled e-commerce solutions due to the
large size and fragmented nature of the industry, its high costs of sales and distribution and the
industry's propensity to embrace technology for automating processes. In addition, rapid
technological change has resulted in the continuing decline of component prices and shorter life
cycles of computer products. Such pressures have heightened the importance for industry
participants to employ build-to-order and configure-to-order models in order to reduce inventories,
to improve the ability to gauge and meet changing customer demand and to shorten time-to-market
by delaying the acquisition of component parts until the time an order is placed. The Company
believes that a key capability required to address these needs is real-time access to information
providing seamless configuration and pricing at the point of sale.
The Company believes there is a significant need for an independent, industry-wide solution to
enable the buying and selling of computer products online. The Company leverages Internet
technologies to provide comprehensive e- commerce solutions designed to increase sales and
marketing productivity, meet end-user demand for online ordering, reduce costs and shorten order
fulfillment cycles for industry participants. The Company's solutions include software applications
that are designed to increase the automation of product search, comparison, configuration, pricing,
financing and ordering, combined with what the Company believes is the industry's largest content
database consisting of detailed product, categorization, compatibility, pricing and availability
information on more than 600,000 active products from over 1,000 manufacturers. The Company is
a party to a technology license agreement with its parent company, Trilogy, which provides pcOrder
the ability to leverage Trilogy's front-office and e-commerce software applications, including one of
the industry's leading configuration and pricing engines. The Company has extended these
applications to support the specific configuration and pricing rules of the computer industry in order
to help industry sales representatives and end- users quickly and accurately build custom configured
systems across multiple vendors. In addition to its development of software applications and content
databases, the Company has completed integrations to the systems of leading industry suppliers for
such functions as order placement, pricing, inventory queries and order status queries, financing and
credit approval. These integrations can be leveraged by pcOrder customers that wish to establish or
enhance electronic links with their business partners. Furthermore, the Company provides software
integration, customization, training and Web hosting services designed to ensure the successful
deployment of its solutions. The Company believes that its position as an independent third-party,
combined with its industry focus and experience, has enabled it to build product functionality,
content and supplier integrations that address the diverse requirements of manufacturers,
distributors, resellers, retailers, other industry participants and end-users, including corporate buyers
and consumers. Accordingly, the Company believes it is able to offer more cost- effective and rapid
time-to-market solutions for e-commerce than the proprietary development efforts of industry
participants. To the extent the Company continues to develop and enhance its software applications,
content databases and supplier integrations, pcOrder believes that the incentive will increase for
companies to outsource these e-commerce services to the Company. STRATEGY The Company's
objective is to be the leading e-commerce technology and content provider to the computer
industry. The key elements of the Company's strategy are as follows: . Leverage internet technology
to provide communication capability and support complex transactions across a range of computer
industry participants; . Broaden adoption of the Company's e-commerce solutions through
relationships with computer industry market leaders; . Extend the Company's position as an industry
leading source of product information source; . Leverage the Company's position as an independent
third-party solutions provider to achieve broad market adoption; and . Expand software
applications functionality to increase automation of the sales, marketing, and channel management
functions of the industry. RELATIONSHIP WITH TRILOGY The Company was established as a
separate business unit within Trilogy, its parent corporation, on July 1, 1993, and was incorporated
under the laws of Delaware on July 18, 1994. Trilogy is a leading provider of sales, marketing and
business-to-business e-commerce applications. The Company has a non- exclusive, worldwide,
royalty-bearing license to certain of Trilogy's front office automation software. The Company and
Trilogy have entered into a License, Services and Technology Agreement, a Management Services
Agreement and a Tax Allocation Agreement which define the on-going relationship between the two
companies. See "Relationship with Trilogy". Following this offering, Trilogy will own approximately
% of the Common Stock of the Company. Trilogy has informed the Company that it does not
intend to sell any such shares in the near future. However, other than an agreement not to sell any of
its shares for 180 days after the date of this Prospectus without the prior consent of the
representatives of the Underwriters, Trilogy is not contractually restricted from selling such shares.
The Company's principal executive offices are located at 5000 Plaza on the Lake, Austin, Texas
78746. Its telephone number at that location is (512) 684- 1100. pcOrder(R), pcOrder.com(R),
pcOrder Labs(TM), CommerceStation(TM), VIPER(TM), Channel Assembly Module(TM), Web
Storefront(TM), Sales Desktop(TM), Customer Desktop(TM), TechBuyer(TM), TechBuyer
Customer Desktop(TM) and "Moving the Computer Industry to the Web"(TM) are registered and
unregistered trademarks, service marks and trade names of the Company. This Prospectus also
contains trademarks, service marks and trade names other than those identified in this paragraph, all
of which are the property of their respective holders. Information contained in the Company's Web
site does not constitute a part of this Prospectus. |
