Getting Cozier in Chilly Times
Commerce One is taking drastic measures to align with its vendor partners in these desperate times.
The e-marketplace software maker is reorganizing its sales and marketing operations to mimic the structure of SAP, its top tech partner. The pair already work together on product development and sales, with the ERP vendor driving 30 percent of Commerce One sales.
Now Commerce One, like SAP, plans to organize its sales and marketing structure around 11 key verticals. "We are going to market with them, and it makes sense to line up and minimize the inevitable conflicts of working with another vendor," says Mark Nittler, Commerce Ones VP of strategic marketing, at the companys eLink partner and user conference held last week in New Orleans.
The reorganization coincides with what both Commerce One and SAP characterize as an ongoing evolution in their relationship, as well as industry rumors that SAP may acquire its partner. "There is some discussion, and rightly so, on who is doing the work and how that gets split," says Nittler, referring to recent changes in the revenue sharing arrangement between the pair that has concerned Wall Street, which is worried that Commerce Ones pie is shrinking.
Commerce One CEO Mark Hoffman defended the relationship, saying that when one partner bears more of the cost of sales, it deserves a larger revenue share.
"In some cases SAP takes the lead, and in some cases Commerce One takes the lead, and sometimes we do joint sales," says Gary Fromer, chief strategy officer at SAPmarkets, SAPs e-marketplace subsidiary. When asked about the revenue-sharing agreement, Fromer adds, "Its not material to SAP ... not yet."
Commerce One is wise to wed itself to SAP because of its 13,000 clients, says Pierre Mitchell, an analyst with AMR Research, adding that closeness may come with a price. "The more SAP invests in the relationship," says Mitchell, "the harder it will be for them to walk away."
Commerce One is taking a similar path with Microsoft. The software giant is loaning Commerce One $25 million to develop a gateway and connectivity kit for BizTalk Server and Visual Studio. The goal is to enable applications on a Commerce One marketplace to route documents using Microsofts BizTalk Framework protocols.
Also, Commerce One hopes to gain access to Microsofts roster of software developers and persuade them to write applications for its MarketSite marketplace platform. Commerce One this summer plans to pilot the gateway and connectivity kit, slated for release by years end. It will be bundled with Microsofts BizTalk and Commerce Servers, which Commerce One will sell.
The eLink event, overall, lacked the buzz of previous years. Says AMRs Mitchell: "It is very somber here compared to last year."
Welcome to desperate times in the B2B world.