January 16, 2002
(Computerworld)
SAP AG and Commerce One Inc. today said news of their divorce has been greatly exaggerated.
After Gary Fromer, chief strategy officer at SAP Markets Inc., revealed that the German enterprise resource planning (ERP) giant would no longer sell the e-procurement software of Pleasanton, Calif.-based Commerce One, many industry watchers took that to mean the companies had reached the effective end of their two-year sales partnership.
Not so, said Fromer in a joint call with Commerce One CEO Mark Hoffman late this afternoon. While SAP and Commerce One plan to divide their e-procurement efforts, the two companies intend to continue and expand their online marketplace development and sales efforts.
Fromer noted that SAP had licensed Commerce One functionality to work inside of its core mySAP Technology. Basically, the Commerce One technology that's used to link trading partners inside a marketplace will be included in SAP e-commerce offerings to enable customers to quickly link their systems with new trading partners.
"It's now an alliance technology we will deliver to every customer," Fromer said.
The two companies will continue to support and jointly sell their MarketSet online marketplace software, which currently boasts 40 customers.
"Both of our companies are committed to pursuing the marketplace business," said Hoffman.
The divide has arisen over e-procurement software, specifically the jointly developed Enterprise Buyer product. SAP will hold the rights to Enterprise Buyer Professional Edition, which concentrates on the procurement of materials and services that go directly into the goods a company sells. The professional edition also provides an enterprise control point for the purchase of standard commodities such as office supplies.
Commerce One will retain ownership of Enterprise Buyer Desktop Edition, designed to give individual employees and departments the ability to buy goods electronically.
Analysts said news that the two companies were parting on the e-procurement software isn't much of a surprise.
"What SAP got from the partnership with Commerce One was the ability to associate themselves with someone who had competence in online commerce in a time where [SAP] needed that sort of association," said Karen Peterson, an analyst at Gartner Inc. in Stamford, Conn. "They were able to use that time to gain competence and develop their own product."
Peterson noted that SAP, originally a financial systems vendor, partnered in the early 1990s with supply chain management vendor i2 Technologies Inc. in Dallas before building its own supply chain product.
David Yockelson, an analyst at Meta Group Inc. in Stamford, questioned whether there was much of a demand for marketplace software, noting that even that functionality will likely fall into the ERP vendors' laps over time.
"It's our view that people are going to want to buy, or at least try to buy, these things from their ERP vendors first," he said. "You have to wonder how much space there is for independents over time."
Peterson said Commerce One has become increasingly dependent on SAP, noting that half of Commerce One's licensing sales occur through the SAP customer base. SAP also owns 20% of Commerce One's stock, having injected $250 million into the company last year.
Stock prices for both companies were lower today, with Commerce One shares losing 31% of their value to close at $2.68, and SAP slipping 3%, from $36.20 to $35.10 a share.
Reporter Marc L. Songini contributed to this report.
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