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Commerce One to Procure for the Antipodes and Elsewhere

Written By: D. Geller
Published On: October 5 1999

Event Summary

Commerce One (Nasdaq: CMRC), the number two vendor of electronic procurement solutions with 6.5 percent of the market according to Dataquest (See TEC's News Analysis article: Ariba Reaches Out To The Little Guy September 28th, 1999) has entered into a partnership with Cable & Wireless Optus (formerly Optus Communications) to establish a trading portal in the Australian region for business to business commerce. Cable & Wireless Optus has also licensed Commerce One's software for its own internal procurement function. Cable & Wireless Optus is the second largest telecom carrier in Australia.

Market Impact

At the beginning of September Commerce One announced a similar partnership with Singapore Telecom Group to supply software for SingTel's new venture (with National Computer Systems) SESAMi.NET, and has an existing partnership in place with Nippon Telephone & Telegraph. These moves give Commerce One tremendous influence in the Pacific at the earliest stages of the electronic procurement boom/growth curve. Together with its activities in Europe, including a partnership with British Telecom, Commerce One is making a strong attempt to capture the world market for E-procurement solutions. However Commerce One is not ignoring the U.S. At the beginning of September it announced a marketing partnership with Compaq Computer Corporation (NYSE: CPQ) in which Commerce One will work with Compaq to deliver procurement solutions, and Compaq's Enterprise Solutions and Services Group will serve as Commerce One's global sales and service channel for Commerce One.

Vendor Winners / Losers

We believe that Commerce One will establish itself as one of the top two E-procurement players in the Pacific, and will have a similar dominant presence in Europe. As a result it will be positioned to increase its market share in the U.S. and Canada as well. In any case Ariba, Commerce One's biggest competitor, will feel pressure to make a major international move, or it will fall behind Commere One in the international E-procurement space.Although Ariba is currently the leader in their battle, if Commerce One, pushes Ariba into fighting a two-front war, which we believe is likely, it might have a chance to change the balance of power between these two leading competitors, possibly pulling within 10 percent of Ariba in global market share in the next 3-5 years..

 
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