Fred Cook, founder, senior vice president, and general manager for the North America region at Houston-based CheMatch.com, saw firsthand the inefficiency, slowness, and need for discretionary trading in the fragmented bulk chemical market, having worked at Dow Chemical and Enron before the Internet found its feet. As a result, several years before anyone had coined the term business-to-business, Cook worked with industry consultants to put together an exchange that would unite buyers and sellers of bulk commodity chemicals in real-time Internet-based trading.

He believed that such an exchange, if properly put together, would give traders a tremendous window to the market. The biggest challenge would then be, Cook says, "just getting traders to put down the telephone and pick up the mouse."

By August 1997, Cook and his crackerjack team of software developers had created a working prototype. Soon after, 10 corporate beta testers Cook had signed gave him a thumbs up, and in February 1998 they petitioned Cook and crew to go live with the product.

Remarkably, in its first 20 months, CheMatch's system facilitated the trading of bulk chemicals valued at more than $100 million. This is an auspicious start in the competitive petrochemicals industry, which expects $178 billion in sales by 2003, according to Cambridge, Mass-based Forrester Research. As of August, CheMatch had surpassed 500 corporate exchange members, a 700 percent increase from January. Furthermore, the company was recently named by AMR Research as the leading independent trading exchange serving the chemical industry.

The company is working hard to keep its site, which allows participants to trade in a simple and anonymous way, at the top of the heap, primarily via constant evaluation of its cutting-edge functionality. Scalability and flexibility are also top priorities in CheMatch .com's development.

"I think the most important lesson I have learned is to be prepared for change," says Michael Ereli, vice president of IT at CheMatch. "In the dot-com world, everything evolves at such a rapid pace that you need to build your applications so that they are open and as flexible as possible -- so that they can quickly be adapted to the rapidly changing marketplace."

Overseeing 70-plus employees and 18 consultants, Ereli will convert the current CheMatch system, built on a Microsoft platform using Windows NT, SQL Server, stored procedures, and ASP (Active Server Pages), to an n-tier architecture built on an Oracle 8i database, using three to four key development languages (HTML, Java, XML, and JavaScript) and working with several other industry-leading technology products (Ariba MarketSuite, BEA WebLogic, ATG Dynamo, and webMethods).

Not satisfied merely to make the technical engine run efficiently, CheMatch is building a comprehensive business solution for trading commodity bulk chemicals, plastics, and fuel products by forming strategic relationships. Its partnerships with eCredit.com and First International Bank, for example, will allow the site to extend financing services to its customers. Other partnerships will facilitate logistics, including transportation, with online tracking, inspection and surveying, and storage, as well as provide financial risk management services.