Event
Summary
According to the press release from June 14 at SAPPHIRE 2000 Las Vegas,
the annual SAP Americas customer conference, SAP AG, the leading provider
of inter-enterprise software solutions, SAPMarkets Inc., the SAP subsidiary
dedicated to delivering mySAP.com marketplaces, and Commerce One Inc.,
the leader in global e-commerce solutions for business, announced a preliminary
agreement to jointly deliver the next-generation e-business marketplace
solution for the Internet economy. The yet to-be-named marketplace suite
promises to revolutionize business by offering companies possibly one-stop
shopping for the entire range of e-business marketplace services. Based
on a common architecture, these services will range from collaborative
design through fulfillment, including industry-based content services
and business intelligence.
The
broad agreement will result in a single joint offering that will include
the best technologies and applications of both companies for e-business
marketplaces. Technology and applications will be provided by SAP and
delivered by Commerce One, SAP and SAPMarkets through joint development,
sales and marketing, beginning immediately. The companies claim that the
marketplace suite will provide customers with highly capable, open marketplace
technology; e-business applications; and delivery capabilities in a single
solution.
Commerce
One will provide the marketplace infrastructure that enables companies
to establish and operate trading portals, and SAP will provide functionality
in the areas of supply chain management, product life-cycle management,
customer relationship management and business intelligence. The marketplace
suite will combine Commerce One's MarketSite Portal Solution, including
the Exchange Operating System, Auction Services and Content Engine, with
mySAP.com e-business applications for advanced planning and optimization,
product life-cycle management and business information warehousing.
The
companies also will join forces to develop a next-generation e-procurement
solution based on customer requirements as part of the marketplace suite.
The marketplace suite will adopt Commerce One's XML Common Business Library
(xCBL), an industry-standard set of XML building blocks, and a document
framework that provides open integration with all buying and selling applications,
as well as open integration with business applications in every industry.
In addition, the companies will extend xCBL to incorporate the SAP Business
Application Programming Interfaces (BAPIs), enhancing end-to-end business
processes over the Internet.
"With
the union of efforts between the companies, we will be able to achieve
our mutual vision of a frictionless economy," said Hasso Plattner, co-chairman
and CEO of SAP AG and CEO of SAPMarkets. "Our 13,000 customers want a
single, market-leading e-business marketplace solution to harness the
power of the Internet. SAP, SAPMarkets and Commerce One will deliver this
solution."
"This
`dream team' of industry leaders will deliver the collaborative marketplace
of the future," said Mark Hoffman, chairman of the board and CEO of Commerce
One. "Our exchange partners worldwide are demanding industry-leading e-business
applications. Our relationship with SAP adds tremendous value across a
broad range of functionality. This is a huge win for the entire Internet
economy."
To
ensure the rapid, global deployment of the marketplace suite, the series
of agreements to be finalized by the companies will result in the purchase
by SAP of approximately $250 million worth of unregistered common stock
in Commerce One as well as royalty sharing between the parties over the
three-year term of the agreements. In addition, the companies will closely
collaborate on new technologies for the marketplace solution.
Market
Impact
Once again, behind the showy marketing pitch lies SAP's tacit acknowledgement
that it cannot manage everything on its own any more. SAP seems to have
departed from its stubborn, build-it-in-house approach. While this backing
down may again be with a heavy heart, it also exhibits pragmatism and
wising up to the circumstances. This partnership is a confirmation of
a significant shift in SAP strategy as it tries to reinvent itself from
a large, inert business applications software company to an Internet leader.
SAP
has to be willing to be more flexible and humble in its strategy if it
is going to succeed in the new economy. With the excess of integration
products on the market and improved interconnectivity, users are becoming
much less wary of gathering best-of-breed components. Ground up development
of a complete end-to-end e-business solution, which would cover all functions
of the front and back office is undisputedly a major mission. This is
particularly true for e-business and Internet market places, which is
all about customization and modeling software to meet the needs of ever-changing
business environments, markets, and the demands of customers and suppliers.
While
SAP can effectively manage large human and financial resources functions,
it would certainly not suffice at this stage; coordination and time constraints
play a major role too. SAP, owing to this alliance, has a chance to put
content behind its extensive recent advertising campaign for mySAP.
One
should not forget that the partnership holds huge potential benefits for
Commerce One too. The company may gain direct and plausible access to
coveted large SAP customer bases in over 20 industries. Furthermore, there
is also the benefit of rounding out its offering with SAP technology to
fend off the threat from Oracle and/or the IBM/i2/Ariba alliance. Until
now Commerce One was lagging behind these in terms of business and supply
chain functionality.
User
Recommendations
SAP and Commerce One customers should certainly consider the combined
offering, but avoid selecting it without looking at what the other vendors
have to offer. Notwithstanding, SAP should be included on almost any initial
long list for global extended-ERP selections. However, existing and potential
users currently evaluating SAP products, particularly its extended-ERP
product components, may benefit from considering already available and
fully functional components from other vendors on the merits of individual
components, instead of blindly following their brand loyalty. Each component
should be put through its paces using a well-documented set of requirements,
scripted scenarios demonstrations and rigorous reference checking.