New Hampshire Business Review - By Michael McCord -April 6, 2001-In the year since the dot-com bubble began to burst, the dire headlines have obscured a more fundamental business truth. While shaky dot-coms have come and gone, the Internet’s role as a potent commercial player is still in its early stages, and the need for e-commerce infrastructure, especially in the business-to-business sector, continues to grow.

In fact, says Mansoor Khan, co-founder and chief executive officer of Nashua-based KeyCommerce, a privately-owned company that provides cutting-edge e-commerce solutions, “e-commerce is here to stay.”

Khan says his three-year-old company is having a relatively smooth sail through the rough economic sea and plans to be around for a long time. “What’s happening is more of a consolidation of the marketplace than an abandonment of the Internet and e-commerce. What we see is a slowdown and we’re noticing longer sales cycles, but the need for e-commerce infrastructure and sophisticated software remains strong.”

Khan, who has a Ph.D. from MIT and more than 15 years’ experience in technology, research and development, product management and business development, is not running his company on blind faith. Despite the dot-com shakeout, the money expected to be spent on e-commerce infrastructure is significant.

A recent comprehensive report from the investment firm of Bear Stearns estimates 54 percent compound annual growth in the DPS (digital professional services) market, from $16.1 billion in 1999 to $89.7 billion in 2003.

And the growth in selling goods and services over the Internet is expected to grow at substantial rates as well. According to Forrester Research, the North American business-to-business e-commerce market will grow from $465 billion in 2000 to more than $3 trillion in 2004. While the slowing economy may dampen the actual figures, it is clear that a lot of money is going to be spent in the next decade to refine and take advantage of the Internet’s e-commerce potential.

KeyCommerce says that what makes its solutions more effective than those of its competitors is that it offers corporations a way to sell more effectively through their distributors and partners. It has landed some major customers in the e-commerce field, including Sybase, Justi2i (based in Brazil) and ProNetLink, and such dot-coms as Tradewind and Clickshare. By far the most prominent KeyCommerce client is Sun Microsystems, which signed on last August.

For Sun’s Professional Services unit, KeyCommerce is building an e-commerce solution for a Fortune 500 client. The system allows the client to sell products via the Internet, providing an alternative channel for sales. In addition, it guides potential buyers to local dealers and provides a means for dealers to register and purchase products from the client.

Entrepreneurial bug
Khan and co-founder Ahmad Kasmieh (now the company’s chief technology officer) have kept KeyCommerce on a smart path since starting the company in 1998. They took out second mortgages on their houses to finance the start-up and have been wise with their investment by plowing profits back into the company for further development and marketing. What KeyCommerce did not do was succumb to the dot-com ethos of growth above all else.

What a difference a year makes. Khan says that last year venture capitalists would take a look at KeyCommerce and then ask about growth and ignore the company’s healthy profit margins. Now the investors have come back around precisely because KeyCommerce was profitable. But Khan says either way, he’s not yet interested in taking additional partners.

“Raising money sucks up so much time, sometimes up to 90 percent of your time. That takes away from making a better company,” says Khan, who admits he’s had the entrepreneurial bug since he arrived from his native Pakistan more than two decades ago.

He declined to give precise figures, but KeyCommerce’s revenue tripled in 2000, and it is expected to more than double this year.

The company grew quickly, says chief operating officer Paul Kriz, but has stabilized at 20 employees, most of whom are involved on the development side.

Company officials say they like their Nashua location because it is a good source of technical and managerial talent. The longrange plan calls for opening sales and development branches in Silicon Valley as well as in Asia and Europe. “We already offer fastto- market, tailor-made solutions for our clients. With 24-hour development work going on around the globe, we will cut our development cycles even more,” says Kriz.

KeyCommerce is confident it will prosper during the economic slowdown. As the Internet business culture matures, large corporations are looking for ways to cut costs, says Marketing Director Susan Kavanaugh.

“We are able to e-commerce-enable companies for a much more reasonable cost than other larger companies. Our ECO-Sell business-to-business sell-side software suite reduces overall corporate e-commerce deployment costs by as much as 90 percent. In fact, companies can earn full payback in as few as four months.”

The second major reason for the company’s confidence is KeyCommerce Wizard, a free Web-based assessment tool that allows companies to select the best e-commerce model for them. The Wizard was released recently in New York City at the iEB Conference, the Internet and e-business conference and expo put on by the Gartner Group.

Khan says KeyCommerce developed Wizard, which is believed to be the only tool of its type on the market, to help customers educate themselves to better determine what they needed because selecting the best model can save a company millions of dollars – while selecting the wrong model can cost even more.