SAP and CommerceOne join on e-marketplaces

Enterprise resource planning software company, SAP has invested $250m in web trading supplier CommerceOne, in a deal that includes joint development of products for the online exchange market.

As part of the much anticipated alliance, the two companies will integrate CommerceOne's portal and trading infrastructure with SAP's software that manages supply chains, product life cycles and customer relationships, as well as its business intelligence tools.

Analysts view the partnership as SAP's most aggressive move to re-position itself as an internet centric software vendor. The German giant has been eclipsed recently by rival Oracle's announcement of its integrated suite of web-based applications.

Simon Pollard, analyst at consultancy, AMR Research Europe, said: "This is the firmest indication yet that SAP has recognised the time to market as opposed to engineering excellence arguments. It is exactly the right thing for SAP to do at this time."

The alliance was said to be "preliminary" and has yet to be branded but the partners promise to provide a common architecture featuring services ranging from collaborative design through to fulfilment. It is considered an ambitious goal because it involves the two companies developing the integration 'glue' that allows online buyers and sellers to automate strategic and ad hoc procurement.

The suite will adopt CommerceOne's XML based Common BusinessLibrary (xCBL) building blocks, and a document framework that provides openintegration with all buy and sell applications. In addition, thecompanies will extend xCBL to incorporate the SAP Business ApplicationProgramming Interfaces (BAPIs).

The aim is to enable SAP enterprise software users to connect to the marketplace suite without upgrading their internal systems. Technology and applications will be provided by SAP and delivered by CommerceOne, SAP and SAPMarkets through joint development, sales and marketing, beginning immediately.

Hasso Plattner, co-chairman of SAP said: "With the union of efforts between the companies, we will be able to achieve our mutual vision of a frictionless economy."

AMR Research believes the agreement leaves Oracle to pursue the more traditionalone stop shop approach. Pollard said: "I think Oracle will be quite wary now the SAP culture appears to be more collaborative."

However, an Oracle spokesperson argued: "[The partner's integration development] will still require a lot of work to get it up and running where Oracle has spent 18 months with 3000 plus developers. It's what Oracle's ebusiness suite is all about."