Commerce One Attempts Web Services Make-Over

E-procurement company is going after services-based integration.

Commerce One Inc. is reshaping itself in the image of a Web services integration software provider.

The beleaguered e-marketplace provider turned procurement and collaboration software maker is now redesigning its namesake business-to-business collaboration platform to provide Web services and application integration capabilities.

In addition to the new version, called Commerce One 6.0 and due to begin beta testing in the fourth quarter, the company is rewriting its sourcing and procurement applications to be enabled for Web services, officials said.

In the meantime, the Pleasanton, Calif., company will merge its Collaborative 5.0 source-to-pay software and Exterprise platform. Together, officials said, the product will create a development platform that will enable companies to connect people and business processes inside and outside the enterprise with native Web services.

"We are in a unique position to fully embrace Web services technology that will ... enable customers to realize substantial costs savings throughout their organizations," said Commerce One CEO Mark Hoffman.

However, observers said Commerce Ones timing is late, as a wealth of other vendors options are already available for integrating applications among companies via Web services.

At the same time, SAP AG, of Walldorf, Germany, which holds a 20 percent stake in Commerce One, will reconsider its partnership with the company if Commerce One fails to meet profit targets for next year, an SAP spokesman confirmed. Commerce One reported a net loss of $220.6 million in the first quarter, ended March 31.

Commerce One customer Chris Borneman said the companys plan to open its proprietary integration technology to a standards-based platform is the right step. However, Borneman, chief technology officer at defense consortium Exostar LLC, said he sees no demand yet for using Web services to integrate with partners. "I dont think its going to happen next month," said Borneman, in Herndon, Va. "Maybe within the year well see that."

Commerce One also faces the challenge of getting supply chain partners to adhere to standards, according to Tom Restaino, manager of e-business at ITT Industries Inc. and the chair of Commerce Ones independent user group.

"The entire [user] community thinks this is a good way to go, since classical procurement is not returning the value," said Restaino, in Palm Coast, Fla. "If Commerce One can pull it off and get these other partners to standardize on business practices, theyll go a long way."

Another customer likes the move toward open standards for B2B integration, but when it comes to integrating systems in his own company, Commerce One is not on his radar.

"Commerce One is focused on procurement," said Jay Lodge, manager of supply chain solutions at MSX International Inc., in Southfield, Mich. "We also have demand planning, logistics, materials and inventory control, which is not a core focus of Commerce One. ... I feel fairly confident in saying we would look to someone else."

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