SAP and CommerceOne join in e-business venture to

Enterprise resource planning software company SAP has invested $250m in Web trading supplier CommerceOne, in a deal that includes 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 lifecycles and customer relationships, and its business intelligence tools.

Analysts view the partnership as SAP's most aggressive move to reposition 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 open integration with all buy and sell applications. In addition, the companies will extend xCBL to incorporate the SAP Business Application Programming 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.

AMR Research believes the deal leaves Oracle to pursue the more traditional one-stop-shop approach. Hasso Pollard, co-chairman of SAP, said: "Oracle will be quite wary now the SAP culture appears to be more collaborative."

However, an Oracle spokesperson argued: "(The partners' integration development) will still require a lot of work to get it up and running where Oracle has spent 18 months with 3,000-plus developers. It's what Oracle's e-business suite is all about."