Commerce One Rolls out 5.0

Targets mid-market enterprises with "componentized" solutions at lower price

Pleasanton, CA  January 31, 2002  Commerce One this week rolled out version 5.0 of its sourcing and procurement suite, touting the solution's relatively lower price and its potential for rapid return on investment for mid-sized companies.

The solution provider also unveiled its plan to roll out a 6.0 version of its suite in mid-2002, with the next revision to take greater advantage of Web services.

Commerce One 5.0 includes the provider's Buy e-procurement solution and One Source, the company's sourcing solution. The applications are built on Commerce One's Collaborative Platform, essentially an integration framework linking the Buy and One Source applications and business processes within and across enterprises.

Speaking at an analyst conference, Alexis de Raadt-St. James, Commerce One's chief strategy officer, said that the 5.0 suite is suitable for companies with revenues of $300 million and above, indicating that the solution provider is moving to broaden its customer base beyond the large enterprises it initially targeted to include midsize organizations as well.

Smaller target customers require a lower cost of entry, and de Raadt-St. James said that Commerce One has designed 5.0 for implementation on a modular basis, enabling customers to focus on key areas, such as procurement, sourcing and auctions, to help achieve faster ROI. Customers could then add modules and capabilities over time.

Duncan Jackson, director of solutions strategy at Commerce One, said in an interview that the provider is offering a vision of end-to-end processes that can be implemented in "bite-sized chunks." "Start with the best return for yourself, with a fast ROI," Jackson advised, and then add new capabilities over time.

In other words, Commerce One is looking to sell into enterprises at a low price point, with the potential to upsell new features later, a strategy similar to that announced recently by Commerce One rival Ariba, which is also offering a "componentized" suite of purchasing and sourcing solutions.

As for the cost of the Commerce One solution, a company could license the Buy application for 100 users starting at $200,000, or One Source for the same number of users starting at $500,000, not including integration costs, according to Raadt-St. James.

Commerce One particularly highlighted the business process integration available through the solution. Customers can develop business process flows tailored for their unique enterprise, industry, region and trading partner requirements, without costly customization, according to Commerce One. "We're about enabling flexible business processes," Jackson said.

Pierre Mitchell, a research director at technology consultancy AMR Research, agreed that the business process capabilities are significant. "The business process management enhancement to the Commerce One platform provides key capabilities sorely lacking in the market," Mitchell said.

With 5.0, Commerce One is attempting to address the entire range of sourcing- and procurement-related activities, from spend analysis to contract management and supplier relationship management on the sourcing side, and from "req-to-check" on the procurement side.

Commerce One's moves to offer a broader solution to a wider customer base have prompted some questions about the software company's relationship with SAP, the German über-provider of enterprise resource planning systems. Addressing that issue, De Raadt-St. James said, "SAP remains a partner, not the partner." Commerce One continues to sell SAP's MarketSet solution but will be offering "complementary" solutions for buying and sourcing. The two also are still collaborating on B2B integration issues, she added.

Addressing its analysts' conference this week, Commerce One CEO Mark Hoffman laid out the company's solution development roadmap, which calls for releasing a 6.0 version in mid-2002. The next revision of the suite will rely on Web services, standard, Web-based applications that can be accessed and used as need by a variety of software.

Commerce One will convert all its applications to Web services, Hoffman said, allowing them to communicate and integrate with each other more easily.


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