Commerce One: "It ain't over 'til the SAP lady sings"

Commerce One is going head-to-head with Ariba with its supply chain product. But the B2B vendor said it had no plans to compete with SAP, and added that half of its annual revenue comes from the alliance with the German ERP giant.

Commerce One's new sourcing tool is very similar to SAP's supplier relationship management software.

However, speaking at the launch of Commerce One 5.0 today, Chris Phillips, EMEA marketing director of Commerce One, said the two companies played at different ends of the market and did not foresee a customer war between them.

Despite recent media reports, he said the two companies were still on good terms and SAP continued to pay licence fees on the Commerce One technology used in its Exchange platform and in the Enterprise professional edition software.

"Our licensing agreement [with SAP] hasn't changed. We expect that relationship to continue to be fruitful for us," said Phillips.

Commerce One has come late to the sourcing game with competitors such as Ariba, Clarus and Freemarkets producing similar offerings last year.

Despite the delay, which Commerce One officials put down to more thorough testing procedures than their competitors, the company is banking on the new software to increase revenue and attract new customers.

While Commerce One officials remained non-committal on revenue targets and customer acquisition forecasts, Phillips said the software's modular structure, which allows users to implement just one component at a time, was designed to prove cost effective in the current climate.

The new product adds sourcing functionality to Commerce One's existing e-procurement software, allowing users to find new suppliers, monitor supplier performance and negotiate contracts online.

Commerce One has also patented one of the components, a business analysis application which allows users to modify the software as internal company strategy changes or new trading relationships arise.

The software comes pre-bundled with adaptors, allowing users to integrate it with back-end systems and external partners.

IDC analyst Mikael Arnbjerg welcomed Commerce One's move to sourcing, and said it will allow it to tap into the SME market.

"This is not really a complete makeover, this is a new way of bundling things. It's good that they are not moving away from their core competency," he said.