One of the significant aspects of FreeMarkets (www.freemarkets.com), a global sourcing market and e-sourcing software provider, is that it is a success in a field of failing enterprises.

The company has sourced $21.2 billion in goods and services for its customers. According to its Web site, it has "identified savings of more than $4 billion." The latter is a most important figure because the reason to use an online marketplace is, in the end, to save money.

Lisa Fleming, corporate communications manager, said that the company offers (among others) five vital services to customers: industry-leading technology, in-depth market information, commodity expertise, network security and global market operations.

Jim Zuffoletti is vice president and general manager of diversified manufacturing at FreeMarkets. He is working to involve more distributors in the company's successful sales system.

"If you aggregate the work we do — MRO, services and fasteners — about five percent are with industrial distributors, but out of $21.2 billion in transactions to date, that is still a substantial figure," he says.

Helping customers find goods for less is top priority, he says. Freemarkets is the largest global sourcing market for fasteners.

"As an example, fasteners costing $2 million in aggregate usage were sourced online for $1.6 million.

According to Zuffoletti, FreeMarkets' success is due in part to the concerns many people have about investing in Internet technology, and their suspicions about a Web site's ability to do what it purports.

"We are successful because we focus on return. We are the largest global sourcing market. We have an average ten-to-one return on investment."

Zuffoletti also notes that the company has concentrated on simplifying online tools and focusing "like a laser on e-sourcing — the enabling of the buying process."

"A number of our customers purchased catalog software for MRO buying. There was much excitement around catalogs vs. online markets. But when they found they had to renegotiate pricing and invest in large infrastructure, they found far too great a complexity," he says.

FreeMarkets is an application service provider, rather than a software seller. Customers only pay for the portion of the business they use online.