A more boastful man
might gloat that he saw the business-to-business
e-commerce boom coming from miles away. Phillip Merrick only wishes more people
had shared his vision when he started his company. In 1996, "nobody was talking
about B2B e-commerce," says Merrick, CEO of WebMethods, a maker of software
that enables transactions over the Web. "People thought that companies would
never go for this."
At first, they didn't. A year after Merrick quit his software-engineering job
at Open Software Associates to found Virginia-based WebMethods, he had maxed
out his credit cards and eaten up $400,000 in capital from an angel investor.
The company got down to just $31 in the bank. Still, Merrick kept the faith.
Before the Internet, companies needed cumbersome, dedicated networks to trade
electronically. "The Web provided a much better way," says the affable,
37-year-old Australian.
Problem was, no lingua franca for such transactions existed. Merrick saw hope
in the nascent standard called XML, an extension of HTML, the common language
for creating Web pages. XML allows companies to identify elements on Web pages
as, say, specific products or prices or quantities. Once that's done, computers
can automatically talk to each other about those products, which makes trading
between companies more efficient and cheaper. WebMethods uses XML to tie
corporate computers together with minimal disruption to existing systems.
Finally, others started to get it. Shortly after flirting with bankruptcy,
WebMethods got a $3.6 million infusion of venture capital. Since then, it has
built a roster of blue-chip customers such as FedEx, Citibank, and Dell
Computer. Then in February, as Wall Street was falling in love with B2B
e-commerce, WebMethods shares soared sixfold from their initial public offering
price of $35. They have since retreated with the market and trade at around
$100. Does Merrick boast? Nope. He's just happy the world has finally caught
on.
Copyright 2005, Bloomberg L.P.
