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Boxman founder slams IBM for collapse

SAP fingered, too

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The founder of Boxman has openly criticised IBM and its e-business technology claiming it made the music e-tailer go titsup.com.

Bill Odqvist - who left the company December 1999 - wants to buy back some parts of the business and resurrect Boxman. He'll be putting his case to shareholders and creditors at a meeting on Monday.

Yesterday he told the Telegraph: "We still believe in the original business idea and we can see very clearly where it went wrong and where the mistakes were made.

"We blame the information technology system. It was too big and too complex. We believe there are much smarter ways to do it."

"The world's largest technology company failed to deliver on its promises," he said.

He even claims he resigned from the board because of the deal with IBM.

If that's the case, then it's clear Odqvist's attack on Ay-Bee-Ehm was motivated by a grudge, a deep-seated inner loathing of Big Blur, no?

Well, not exactly. One of the central planks of Boxman's recent failed bid to secure second round financing focused on IT. According to its business prospectus it wanted to raise £30.7 million to "expand its product range" and "engage in detailed analysis to "increase customer repeat purchases" and the "average amount spent per customer". Already a multi-platform player that had branched out into WAP (Wireless Application Protocol) and interactive digital TV (iDTV), it wanted the cash to expand its reach and invest in new generation technology.

But it also stated that it wanted to "continue to develop the group's IT systems" - even though it was only 12 months into a three year deal with Big Blur.

The prospectus continues: "Many of the issues faced in establishing the Group's centralised IT function have been complex and expensive. The use of an external provider for both hosting and development has involved compromises in flexibility and performance. The Directors believe that these issues have adversely affected the ability of the Group's local country operations to deliver the desired levels of customer service. These issues have also limited the amount of management information available to logistics, finance and marketing departments over that period."

So it's not just an ex-board member who thinks IBM sucks; the most recent executive of the dotcom also finger IBM.

This is damning stuff - especially when you consider that according to information obtained by The Register, Boxman spent £16 million of its £24 million budget on IT.

Furthermore, Boxman's prospectus outlines a number of steps it took to improve matters. For instance, it developed a new pan-European front end in-house which was due to "take over the operations of the main country sites in the first half of 2001". The system was expected to bring "major improvements in control and flexibility as well as reducing maintenance costs".

It also developed a new database structure because it was believed that the company's SAP system did "not offer the required levels of speed and flexibility".

And Boxman also amended its contract with IBM including the clarification of "all outstanding disagreements with IBM".

In practise, the technology it was unwieldy and obstructive. According to information obtained by The Register it would take up to three weeks to include a new CD onto the site or amend pricing details. The e-tailer was hamstrung by the very technology that was supposed to help it thrive and compete.

IBM and SAP were invited to comment on the allegations but failed to reply by press time.

Instead, here's an extract from an IBM case study dated 29th March 1999:

"Utilising IBM's Net.Commerce e-business solution, Boxman provides customers fast, convenient and inexpensive access to over 500,000 CDs online. With the capacity to handle nearly 14,000 orders per day in a number of different languages, Boxman's IBM-hosted site will process and co-ordinate transactions across all international offices between partners, distributors and suppliers."

Funny, doesn't seem to chime with Boxman's version of events. ®

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