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October 31, 1999

Instil Announces Low-Cost Hosted Web Auction Service

By CBR Staff Writer

UK e-commerce software development firm Instil Ltd released on Friday software to allow companies to easily set up consumer web auction sites, to be remotely hosted and managed by Instil. The company also revealed it has sold the package to and is developing further e-commerce systems for UK number one ISP Freeserve Plc, which Thursday launched Freeserve Auctions Ltd, an 80:20 joint venture with, a subsidiary of Classified Ventures Inc.

AuctionServe is a consumer-facing version of InstilÆs previously released Auctioneer business package. The software allows the usual kind of transactions permitted by the likes of eBay Inc and QXL Plc, with extra functionality such as the ability to conduct Dutch auctions (where bidding runs in reverse), and carry out automatic bidding.

The software is written entirely in Java, and sits on an Oracle database and a Websphere web application server. Instil hosts the auctions from co-location facilities provided by its internet service providers including UUNet Inc and, primarily Planet Online, the ISP behind Freeserve.

To buy the software outright costs 150,000 pounds ($245,400), or it can be rented as a hosted service with three service levels, based on auctioned lots per month. Below 100 lots the service costs 1,500 pounds ($2,450) per year, under 500 the annual price is 5,000 pounds ($8,100), and under 1,000 is 8,400 pounds ($13,700). Anything above that is by negotiation, and monthly rates are often used. Simple re-branding comes as a part of the 4500 pounds ($7,362) setup fee, but any extensive site redesigning must be executed by Instil XML engineers for an additional fee.

Although the software has been bought by Freeserve, the ISP giant is only using it as a backup system, other customers include West One Technology Ltd, which runs mobile phone site, and British Car Auctions Ltd. Scott Boocock, marketing director at the London-based firm, quoted Forrester Research Inc figures which suggest 30% of e-commerce transactions will be from auction-based sites. He said the company reckons many non-auction sites will soon add auction capabilities to increase site stickiness and create much-needed revenue streams. AuctionServeÆs relatively low-risk service should allow niche service providers to exploit auction technology, he said.

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