Like most early exchanges, Levin and crew initially believed e-Steel’s contribution would be to bring buyers and sellers together more efficiently over the Internet and to open up doors to trading partners that were otherwise out of reach. Forget the laborious and error-prone fax and phone process traditionally associated with buying and selling steel: An online exchange model lets industry players from steel mills to service centers submit requests for proposals for all types of steel products, compare pricing and packages across multiple suppliers, negotiate price and complete transactions, all from a secure, global marketplace. Unlike most of its competitors, including primary rival MetalSite (www.metalsite.com) of Pittsburgh, e-Steel took aim at negotiated transactions among known parties instead of relying on auctions for spot purchases of goods. Steel makers LTV Steel Co., Steel Dynamics and Weirton Steel Corp. were the initial investors in MetalSite when it launched in 1998 as a limited partnership.

As e-Steel began rolling out to beta customers in the summer of 1999, the thinking surrounding integration rapidly changed. Instead of appealing to companies for one-time transactions with new partners, major steel companies were looking at the e-marketplace as a venue to transact all of their business with their largest suppliers and customers. Given the scale of possible transactions, e-Steel would not be able to deliver any significant value beyond the old way of doing business via fax and phone without a solid integration strategy.

"The concept of integration was always in the back of our minds because once we built a marketplace, we knew people would want to eventually connect it to ERP [enterprise resource planning] systems," Levin explains. "But we had to put it front and center because to the extent you don’t connect, you’re left with little more than e-mail as a replacement for fax and phone."

To kick start the effort, Levin brought in Chief Technology Officer Tom Costello, a former senior vice president at CyberCash, a maker of e-commerce payment software. Costello joined last October, just a month after the first e-Steel transaction. At the time, there were only five e-Steel employees and a couple of dozen folks from Computer Sciences Corp. (CSC), a consulting company that built the initial site using packaged e-commerce software from BroadVision. Costello soon recognized that e-Steel had considerable work to do to reposition itself around integration. "When I came on board, we had nothing from an integration standpoint," Costello recalls. "We had to take control of the technology that would drive forward our vision."