On-line auction Web site eBay Inc. announced that it has outgrown its in-house proprietary software applications and will replace them by next year with IBM Corp.’s WebSphere e-commerce package.
Under the deal, IBM will replace eBay’s on-line auction software with WebSphere, which will run the bidding and listings for millions of eBay users as they offer items for sale and make purchases.
Kevin Pursglove, a spokesperson for San Jose-based eBay, said the proprietary software that eBay engineers have developed since the company was founded in 1995 has run its course.
“Clearly we have experienced phenomenal growth over the last two or three years,” Pursglove said. The new software will prepare the company for future growth by being scalable, flexible and more reliable, he said.
Software from almost 20 companies was reviewed beginning last year, he said, and the competitors were whittled down to three in recent months.
The company chose to replace its proprietary software when it became clear that “it would have had to be reinvented” to keep pace with future business growth, Pursglove said.
Past service outages and glitches experienced by eBay customers, including two highly publicized outages in June and August of 1999, were also in the minds of eBay executives as new software was being explored.
“Clearly at that time we began to look at the system” and the improvements and safeguards that were needed, he said. “The outages are in our history, but you’re always looking for ways to improve.”
The new software aims to increase developer productivity and application programming interface integration, to enhance the ability to easily add new features and user tools and to improve site dependability while improving ease of use for customers.
eBay will run WebSphere on existing hardware, which includes Compaq Computer Corp. servers on its front end and Hitachi Ltd. and Sun Microsystems Inc. servers on its back end.
No price tag has been released for the deal, which is likely to be in the tens of millions of dollars. The replacement will begin later this year and is expected to be completed by early next year.
Also part of the contract are provisions for IBM to expand its presence on eBay, using it as a global trading site for targeted buyers. The two companies will also explore joint marketing opportunities both online and in traditional mediums.
“As premier e-businesses such as eBay increase transactions and link operations with other enterprises, integrating disparate computing systems and business applications becomes critical,” said Samuel J. Palmisano, president and chief operating officer of IBM, in a statement. “An open, robust computing infrastructure, built around a common set of Web services, will enable this next phase of e-business.”
Meg Whitman, president and CEO of eBay, said in a statement that “eBay and IBM will help each other achieve even greater success.”
IBM is already an eBay partner, with an on-line presence in eBay Stores on the Web site.
“With more than 34 million registered users, eBay is a strong branding platform for almost any company,” said Lou D’Ambrosio, vice-president of marketing and sales at IBM Software Group, in a statement. “By increasing our presence on the site, we’ll increase traffic to IBM’s eBay store as well as to IBM.com.”