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Commerce One Holds Announcement Festival

Written By: D. Geller
Published On: October 2 2000

Commerce One Holds Announcement Festival
D. Geller - October 2, 2000

Event Summary

Commerce One's annual meeting was held in Las Vegas On September 18-20. Items about partnerships and recent successes dominated the announcement list. One significant exception was the release of Auction Services 4.0, Commerce One's B2B auction management product. This release provides support for more complex transactions than before, puts more types of auction at the customer's disposal, and has Request for Proposal and Request for Quote capabilities. The release will available in Q4 of 2000, both as a separate product and integrated with the joint offering from Commerce One and SAP AG's SAPMarkets subsidiary. A related announcement stated that Commerce One customers had reported involvement with auctions having a total value of over $2 billion.

Although previously announced (see SAP Gives Up, Declares Victory Again ), the partnership with SAP remains big news for Commerce One. The jointly developed products MarketSet and Enterprise Buyer are now generally available. MarketSet is an eMarketplace suite that includes both collaborative supply chain capabilities and business process analytics. Enterprise Buyer is a buy-side e-procurement application.

Surprising to some was Commerce One's decision, as revealed by TheStreet.com, to terminate development of its own buy-side solution in favor of the new EnterpriseBuyer software.

Other announcements at eLink2000 included

  • A joint effort with Boeing Corporation to enable EDI-based companies to join Exostar, the Aerospace & Defense industry's global e-marketplace

  • A partnership with systems developer Computer Sciences Corporation to provide e-commerce solutions to business and governments on a worldwide basis and to Federal markets in the United States

  • An agreement that Cap Gemini Ernst & Young U.S. LLC would be a solutions provider for Commerce One products and services

  • A strong alliance with Compaq. Commerce One will make Compaq equipment the preferred servers for its NT systems, Compaq will be a reseller of Commerce One products, and Compaq Global Services will be a tier one, preferred global systems integration partner for Commerce One worldwide.

Market Impact

This is a solid set of announcements, but it doesn't generate the excitement of Ariba's. The SAP partnership will be a terrific source of revenues for Commerce One, but we think it will not prove much of a technological boost. This isn't a bad thing. We're sure that Commerce One has more innovation up its sleeve, and as the details of its arrangement with General Electric become clearer we may see a number of announcements that are both financially and technologically interesting.

If (technological) excitement was muted, surprise was abundant. As measured by its official press releases, Commerce One seems to have wanted to play down the termination of BuySite, and not without reason. This represents a major change in direction. In general we think it is a wise one. Many companies will be happy with buy-side software from third party providers that provide on-ramps to Commerce One. Commerce One can move more into concentrating on marketplaces and transaction-based revenues.

The move has two potential downsides though. Current BuySite customers are bound to feel uncertain, if not unhappy. And we're not so sure about moving that much closer to SAP, especially in the early stages of their relationship. We'd hate to have Commerce One find, a year down the road, that they've lost independence of action by doing this. Developing a strong relationship with GE may be necessary to counterbalance the weight of SAP.

User Recommendations

Both Ariba and Commerce One remain obvious choices for e-procurement and marketplace solutions, but the trick for the user is determining which company makes the best match. A company of any size whose major interest is in a buy-side procurement solution will find other vendors anxious for the business. One of these is now SAP, of course. TEC believes that Ariba will not part with its own buy-side software as easily as Commerce One did, both because Ariba doesn't have a partnership that is likely to produce and market a replacement and because the company remains emotionally attached to that part of its business.

Although SAP's first shot at e-business, mySAP, fizzled, we expect the new approach to succeed and to carry Commerce One along with it. How much Commerce One will become tied to SAP to the exclusion of other markets is hard to tell. In a chicken-and-egg way it may depend on how tight potential customers perceive the linkage to be. We continue (see Commerce One: Everything But Profits) to predict some kind of fissioning in Commerce One, such as a formal separation between the marketplace and procurement sides of the business.

But overall there is no obvious winner in the sweepstakes. Customers for whom a sophisticated supply chain solution is the overriding concern will lean toward Ariba, just as current SAP users will lean toward Commerce One. But the complexities of these solutions, and the overall similarities between the capabilities of the two companies, dictate that users conduct very careful evaluations of both before making a decision.

 
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