Ion Wave Technology partners with SciQuest

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Paul Schreiber|ret||ret||tab|

SBJ Reporter|ret||ret||tab|

pschreiber@sbj.net|ret||ret||tab|

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One way to establish a larger a client roster is to join forces with a business that already has one.|ret||ret||tab|

Ion Wave Technologies, a Springfield-based software company specializing in sourcing and electronic-procurement programs entered a partnership March 3 with Raleigh, N.C.-based SciQuest Inc. to develop programs tailored to that firm's higher education and life sciences market, said Darren Henderson, Ion Wave CEO. |ret||ret||tab|

Ion Wave is the 2002 reincarnation of Way2Bid, originally formed in 1996, Henderson said. Way2Bid, an Internet-based procurement company, closed May 13, 2002. Since June 2002, the company has been located at 318 Park Central East, Ste. 601, and employs four. |ret||ret||tab|

The Way2Bid software product was a joint bidding and e-procurement product, said Henderson, one of Way2Bid's founders. What Ion Wave has done is split the two functions into separate software programs that can be marketed individually, he added. |ret||ret||tab|

For Ion Wave the partnership with 9-year-old SciQuest has the promise of opening doors to a larger and more diverse clientele. SciQuest's customer list in higher education and life sciences includes institutions like the universities of Arizona, Chicago, Michigan and Edinburgh; while firms like GlaxoSmithKline, Pfizer and Roche head its life sciences roster, said Kristi Lee, marketing communications manager for SciQuest.|ret||ret||tab|

The partnership "extends our ability to market to those firms without having to put a big sales force on the street," said John Alexander, Ion Wave chief operating officer. "That's a key advantage to us." Ion Wave's traditional markets have been small cities, K-12 school districts and medium-sized institutions. |ret||ret||tab|

A critical factor in the partnership for SciQuest was the speed with which it could add a bidding component to its product line without having to build its own program, said Jamie Duke, SciQuest chief operating officer. This union allows SciQuest to get to market much quicker, he added.|ret||ret||tab|

"They build the technology and we have partnered with them to rebrand it and offer it to our target market," Duke said.|ret||ret||tab|

The bidding software Ion Wave has created enables an institution to rapidly negotiate purchasing arrangements and pricing structures with vendors online rather than the traditional method through the mail, Alexander said. Document preparation, mailing time for 10 to 15 vendors, as well as slow vendor response time make the old method cumbersome and expensive, he added. |ret||ret||tab|

The e-procurement software expedites the order through a purchasing system resembling an Amazon.com interface, Henderson said. |ret||ret||tab|

The programs are "vendor neutral," Henderson said. "The software's designed to speed the process, not to market a particular product." |ret||ret||tab|

Ion Wave sells its software in two ways. A one-time sale gives the client the program and license outright, whereas a monthly subscription plan keeps the license with Ion Wave and it handles program operations via its own server or through its contract with SpringNet, City Utilities' server, Henderson said. One-time buys can range from $35,000 to $100,000 and the ongoing service runs $1,500 to $2,000 a month, he added.|ret||ret||tab|

While SciQuest's client base numbers in the dozens, Ion Wave's numbers just five. One of those, and the only Missouri-based client, is Ozarks Technical Community College. |ret||ret||tab|

For $1,000 a month, OTC handles its bidding needs through Ion Wave software, said Jon Ames, dean of administration. The school has a one-year contract with two one-year renewals, he added. |ret||ret||tab|

What used to take weeks and created a stack of paper a foot high, is now compressed into a few hours' time, Ames said. All bids are held on Ion Wave's server, he said. It compiles the bids and prints out bid summaries. "The only paper I have is the print-out of the bid tabulation," he added. |ret||ret||tab|

Ames said Ion Wave's elimination of the 1.25 percent transactional fee charged suppliers that was part of the Way2Bid model makes the program more attractive all around. |ret||ret||tab|

As of April 20, New Mexico State University became the first client to come on board under the Ion Wave-SciQuest partnership, Lee said.|ret||ret||tab|

In New Mexico, SciQuest is bundling Ion Wave's software with its own services and offering its e-procurement and Ion Wave's sourcing manager to the university, Henderson said. |ret||ret||tab|

While not disclosing 2003 revenues or forecasting for 2004, Alexander said Ion Wave's customer base should triple by the end of this year as a result of both its independent sales and those it makes with SciQuest. As a result, revenue should triple too, he added. |ret||ret||tab|

On April 12, publicly held SciQuest announced it had entered a definitive acquisition agreement with Trinity Ventures, a privately held firm, Duke said. Under the arrangement, the $25.25 million sale of 90-employee SciQuest is set to close on or about July 31. |ret||ret||tab|

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