Commerce One wins computer parts exchange contract

NEW YORK: Commerce One Inc. on Monday said it had won a coveted deal to build an online purchasing marketplace that links computer parts makers globally, the latest in a string of high-profile contract wins for the company. Mark Hoffman, Commerce One's chairman and chief executive, said in a phone interview that his company had begun operating a pilot version of the new eHITEX computer marketplace that links buyers and sellers of $300 billion in goods annually.

The contract puts Commerce One in the driver's seat for one of the world's two leading marketplaces for high-tech goods and follows a series of contract wins during the recent quarter that has nearly doubled the number of the world's largest companies operating in Commerce One-engineered marketplaces.

The high-tech components exchange joins other major Commerce One marketplace wins this year including its aerospace marketplace developed with Boeing Co. and an auto parts exchange backed by General Motors Corporation. No financial terms for the eHITEX deal were disclosed. The exchange, which is already in operation, remains a pilot project. The agreement with eHITEX partners must still be finalised, Hoffman said.

"Last quarter about 27 of the Global 200 companies were participating in marketplaces we had announced," Hoffman said. "By the end of this quarter, we should have 40 to 50 of the Global 200 that are plugged into (our) exchanges," he said. But, when asked how the string of deals might affect Commerce One's financial results in the current quarter, Hoffman demurred, saying the company was in its "quiet period" ahead of its third quarter earnings report in mid-October.

"We continue to see very strong performance in this sector marketplace," he said, but made no further comment. The news did little to help Commerce One stock, as its shares slid $3-3/8 to $66-7/8, a fall of 4.63 per cent on the Nasdaq in afternoon trading on Monday, amid a stiff sell-off in business software stocks and other leading high-tech names.

The eHITEX computer purchasing marketplace was announced in June by a group of 15 major computer makers led by Compaq Computer Corp. and Hewlett-Packard Co. It includes some of the world's biggest makers of PCs, disk drives, chips and several of Asia's leading contract manufacturers.

"It's a good win for us. It's a good win for SAP," Hoffman said, referring to the German software company that has become Commerce One's key partner in developing online business marketplaces. EHITEX will compete with a rival computer parts exchange formed by International Business Machines Corp. along with its technology partners, Ariba Inc. and i2 Technologies Inc.

In addition, Commerce One announced a series of new products plans during a customer conference it is holding this week in Las Vegas. Among the announcements, Commerce One unveiled the latest version of its business-to-business auction software, known as Auction Services 4.0.

The company said a survey of the 22 major auctions using Commerce One systems showed about $2 billion worth of goods had traded over them since it introduced the auction-selling format earlier this year.

Commerce One also said it and SAP had delivered their first round of integrated products that allow companies to automate many of the functions of buying and selling supplies. The SAP-Commerce One system is designed to handle a full spectrum of purchasing functions for direct goods, including auctions, requests-for-proposals (RFP) and bill-and materials.

"We did what we said we were going to do," he said. "We are on track to ship a totally integrated procurement system in November." Commerce One and SAP also announced a new affiliate programme with 40 Web-based business services companies to syndicate a range of niche services to buyers and sellers participating in CommerceOne.net electronic marketplaces.

Among the 40 partners are Celarix, a specialist in supplying the latest messaging technology for industrial supply-chain logistics and transportation; eCredit, a provider of business inventories financing, and FindMRO.com, a source for maintenance, repair, and operating (MRO) supplies used in keeping industrial companies' basic operations up and running.

(C) Reuters Limited 2000.