RE: B2B at Enron

Tom,

Greg's phone number is 713 853 5220. He is very difficult to reach
(frequent trips).

You may find this information useful: Greg is a West Point graduate
and spent a few years in the military, before obtaining an MBA from Stanford.
He is a very dynamic person and a very pragmatic thinker.

I hope you have a great holiday weekend.

Vince

"Piazze, Thomas" <piazzet@wharton.upenn.edu< on 06/29/2000 08:51:48 AM
To: "'Vince J Kaminski'" <Vince.J.Kaminski@enron.com<
cc: "Gerrity, Thomas" <gerrity@wharton.upenn.edu<, "Lohse, Gerald Lee"
<lohse@wharton.upenn.edu<, "Wind, Yoram" <windj@wharton.upenn.edu<, "Harker,
Patrick" <harker@wharton.upenn.edu<, "Amit, Raffi" <amit@wharton.upenn.edu<,
"'shankman, jeff'" <Jeffrey.A.Shankman@enron.com<, "MacMillan, Ian"
<macmilli@wharton.upenn.edu<
Subject: RE: B2B at Enron

Vince: Thanks for this message and update on your recent actions to
establish a closer research relationship between Enron and Wharton. We are
anxious to work with your firm on many fronts and appreciate all that you
and Jeff Shankman are doing to facilitate closure on a number of
initiatives.

The below article is very interesting and reinforces the entrepreneurial
culture of Enron; it also points out one more reason why our faculty is so
interested in collaborating with you and other executives as the company
moves into this new space.

I would like to call Greg Whalley after the 4th of July weekend to establish
contact and begin a dialogue regarding his interest in joining our efforts
as a Corporate Partner. Will you please provide me contact information?

Please let me know if there is any additional information or material you
will need prior to your meeting with Jeff Skilling. We are anxious to learn
how he responds to your suggestions.

Thanks again for all that you are doing. Hope you have a great 4th of
July!!

TOM

< -----Original Message-----
< From: Vince J Kaminski [SMTP:Vince.J.Kaminski@enron.com]
< Sent: Wednesday, June 28, 2000 9:53 AM
< To: piazzet@wharton.upenn.edu
< Cc: Vince J Kaminski
< Subject: B2B at Enron
<
<
<
< Tom,
<
< I am sending you the information about our new B2B unit.
< I have talked yesterday with Greg Whalley who is heading the new
< unit about the E-commerce project at Wharton and recommended that Enron
< join
< this program.
<
< I have sent him this morning a copy of the materials you gave me.
<
< The meeting with Jeff Skilling has been pushed till the 2nd half of July.
< I talked to him briefly twice that Jeff Shankman and I want to discuss
< with
< him building a relationship with Wharton. Jeff Shankman is, by the way, a
< great
< friend of
< your institution.
<
<
< Vince
<
< **************************************************************************
< ***************************
<
< COMPANIES & FINANCE: THE AMERICAS: Enron sees bricks and
< bytes mix reshaping energy market: Purchase of MG
< only a
< start in
< building B2B platforms, writes Hillary Durgin:
<
<
<
<
< COMPANIES & FINANCE: THE AMERICAS: Enron sees bricks
< and
< bytes
< mix reshaping energy market: Purchase of MG only a
< start in
< building
< B2B platforms, writes Hillary Durgin:
< 99% match; Financial Times ; 16-Jun-2000 12:00:00 am ;
< 604
< words
< By HILLARY DURGIN
<
< If Jeffrey Skilling is right,
<
< Enron's acquisition of MG is only the tip of the
< iceberg.
< Enron's president and
< chief operating officer is engineering a fundamental
< strategy shift at the
< Houston energy company, aimed at making it a dominant
< "new
< economy"
< player across various industrial markets.
<
< The Dollars 446m acquisition last month of MG, the
< UK-based
< metals trader,
< is only the first of more than Dollars 1bn in
< estimated new
< investments the
< company is targeting. It is seeking vehicles on which
< to
< build
< business-to-business (B2B) platforms in sectors such
< as
< logistics, chemicals,
< agricultural products and pulp & paper.
<
< Mr Skilling wants to take the business model the
< company
< developed in
< natural gas and power and apply it to other wholesale
< commodity markets. He
< argues the electronic platforms it creates will not
< only
< become the principal
< B2B sites for those sectors, but reshape those
< industries.
<
< As an example, he points to Enron's new e-commerce
< platform,
< EnronOnline,
< which has changed the way the company does business
< with its
< customers
< while significantly increasing sales.
<
< The company - the largest wholesale merchant of
< natural gas
< and power - saw
< wholesale, physical deliveries of natural gas surge 53
< per
< cent in the first
< quarter.
<
< Critics argue that Enron's move away from its familiar
< energy business into
< new industries, where the learning curve is steep and
< the
< competition
< entrenched, is risky. Yet a number of industry
< analysts
< point out Enron has
< proved it understands markets and how to manage risks
< while
< becoming the
< largest importer of coal in the UK, the largest trader
< of
< gas and power in the
< US and grabbing an advantage in bandwidth.
<
< "It's a prudent strategy, but it's got to be done in
< an
< orderly way," says Ronald
< Barone, analyst with Paine-Webber in New York. "What
< they're
< doing here is
< what they've been incredibly successful at doing," he
< adds,
< noting that Enron
< posted Dollars 1.3bn in earnings before interest and
< taxes
< (ebit) from its
< wholesale energy and services business in 1999, up 34
< per
< cent from the
< previous year.
<
< Earnings from that division accounted for two-thirds
< of the
< company's overall
< income before interest and taxes last year, and Mr
< Barone
< sees the unit's ebit
< increasing 15-30 per cent annually over several years.
<
< As with gas and power and now broadband, where Enron
< is
< standardising
< contracts and creating a market in bandwidth, it wants
< to
< create markets by
< entering as a physical player and providing merchant,
< risk
< management and
< financial services over the internet.
<
< "We will provide electronic commerce, but we will
< provide
< liquidity and we will
< provide settlement, or fulfilment of that contract,"
< Mr
< Skilling says. "That is an
< extremely powerful model. If you look at other B2B
< sites,
< they don't do that."
<
< Mr Skilling argues Enron's e-commerce platform will
< triumph
< over the other,
< bulletin board-type exchanges, where striking a deal
< depends
< on two parties
< hooking up and working through uncertainties over
< timing,
< price, credit and
< fulfilment.
<
< Not everyone shares that view. Some energy companies,
< for
< example, would
< rather not do business with a competitor. BP Amoco
< recently
< purchased a 3
< per cent stake in Altra Energy Technologies, a
< Houston-
< based, neutral
< wholesale energy exchange. With Koch Industries and
< American
< Electric
< Power, it also committed to carry out a fixed volume
< of
< transactions on the
< site to lend it liquidity.
<
< Just as in gas and power and now broadband and metals,
< Enron
< believes it
< needs networks of strategic physical assets. In
< acquiring
< MG, Enron got a
< stable of warehouses, lending it a strong physical
< position.
<
<
< "It should provide (MG) with a more vibrant, more
< active
< physical spot market
< in more markets in the world," says Greg Whalley,
< chief
< executive officer of
< Enron Net Works, the new division Enron is launching
< to
< identify and enter
< commodity markets. He argues that in metals and other
< markets, Enron will
< deliver better pricing, price risk management
< services,
< cross-commodity
< transactions and flexible transactions for a wider
< range of
< customers.
<
< Mr Skilling says there are significant rewards for
< restructuring an industry.
<
< "If you can take that platform, and you use the
< capabilities
< the bricks bring to
< the table, e-commerce the industry and change the
< structure,
< you're selling for
< more than a 50 multiple."
<
< Copyright , The Financial Times Limited
<