Siobhan Kennedy
NEW YORK: Commerce One Inc., seeking to boost its stake in the hotly
contested business-to-business commerce sector, this week announced new software
which it said enables corporate buyers to work with suppliers without having to
pay fees to online marketplaces.
Commerce One, which makes marketplace software that brings buyers and
suppliers together over the Web, said its new Collaborative Procurement offering
enables suppliers to bypass marketplaces and send their product catalogs
directly to customers.
"In the past, customers either had to download product catalogs over the
Web or connect directly to the suppliers' web site," said Steve Viarengo,
Commerce One's director of solutions strategy.
Viarengo said the new offering - which combines Commerce One's procurement
software with features from its core marketplace technology - lets buyers store
suppliers' catalog data on their own network and conduct the transaction with
the supplier privately.
"It bypasses the need to go to an outside marketplace," Viarengo
said. He added that the new offering was not intended to replace Commerce One's
full-blown marketplace platform, MarketSet, developed in conjunction with German
software giant SAP AG. That software also includes such features as auctions and
payment services, plus the ability to connect to back office planning,
manufacturing and logistics applications, Variengo said.
"Grandiose visions"
"This is a reflection of where we see B2B going in the coming years,"
Rick Villars, an analyst with industry research firm International Data Corp
said. "With a little less grandiose visions for industries and a lot more
practical implementation at a company level."
Joshua Greenbaum, principal of Daly City, California-based Enterprise
Applications Consulting said Commerce One was following the trend in the B2B
industry by adopting the term "collaborative" to describe its
software. "The real problem is that procurement on its own is not a
particularly sexy term right now, and collaboration is," Greenbaum said.
Niche markets shrinking
Companies like Commerce One and rival Ariba Inc. burst onto the scene
touting products that let companies use software to buy goods over the Web
rather than waste time and money using paper, pens and fax machines.
But over the last year, those firms have seen their share prices tumble as
the flagging economy and a slowdown in high-tech spending have taken their toll
on the once high-flying B-to-B sector. In addition, those B2B marketplaces have
been very slow to take off. Suppliers are reluctant get on board, and without
goods to buy, customers have been few and far between.
Now analysts are predicting that the market for niche players, like Ariba, is
shrinking, as customers look to bigger software vendors, such as Oracle Corp.,
to buy all their software products in one go. "They have to find ways to
package this functionality so that it will be palatable to users,"
Greenbaum said. "They have to move it upstream beyond just the commodity
view of procurement."
By doing so, Villars said Commerce One will also help encourage buyers to get
more suppliers on board. "In some ways it's an acknowledgment that the big
buyers are going to have to do something to bring their suppliers on line,"
Villars said.
(C) Reuters Limited 2001.