Strategic Sourcing Options on Rise

With the acquisition of Atlas, Verticalnet software now competes with established developers'.

Verticalnet Inc. is making good on a promise to provide collaborative sourcing software for private e-marketplaces through its acquisition last week of Atlas Commerce Inc.

But even as it readies software that will enable companies to find and procure goods online, Verticalnet is entering a market where established developers, such as Oracle Corp. and Commerce One Inc., are already rolling out software that promises much of the same functionality.

The $24 million purchase of Atlas, of Malvern, Pa., gives Verticalnet software for auctioning and making requests for quotes. It also brings "a particular strength in vendor and order management that really extends into the collaborative exchange," said Mike Hagen, president and CEO of Verticalnet, in Horsham, Pa. "Thats where we get a lot of sizzle from this deal."

As a result, Verticalnet this quarter will release its integrated Collaborative Sourcing suite, which builds on Atlas capabilities to provide spend management functionality. During the second quarter, Verticalnet will release an integrated tool set for data normalization that provides visibility across disparate business units, said Hagen.

Late last month, Oracle and Commerce One each announced strategic sourcing products, which are available now. Each also is planning additional releases in the spring. Oracle, of Redwood Shores, Calif., and Commerce One, of Pleasanton, Calif., were playing catch-up to strategic sourcing plans previously announced by PeopleSoft Inc. and Ariba Inc.

Some IT managers are willing to overlook the marquee names because they believe smaller companies are more nimble and thus more responsive to their needs.

Joy Mining Machinery, a division of Joy Global Inc., licensed Atlas sourcing software 20 months ago and set up an electronic hub for supplier settlement.

Given that Joy runs SAP AGs enterprise software, Vice President of MIS Sean Bradley had the option to choose an e-business giant for collaborative sourcing software.

"Our decision to go with Atlas was probably cost-effective," said Bradley, in Warrendale, Pa. "We dont see anything incongruent with being an SAP shop and using software like Atlas. The flexibility that Atlas gives is one of the reasons we went with them. The adaptability and willingness to make changes, the fact that we caught them early on ... were getting something more specific."