A year after the e-marketplace boom—and subsequent bust—leading b-to-b e-commerce vendors are going back to basics with tools that help companies manage their purchasing programs.
Leading the way is Commerce One, which a year ago built practically its whole strategy around helping companies and consortia build massive public e-marketplaces, most notably auto hub Covisint.
Now Commerce One is rolling out an application suite that moves it away from selling e-marketplace platforms and toward a series of modular sourcing and procurement applications. It hopes these will offer the sort of quick ROI capabilities that will appeal to today’s cost-conscious companies.
The new Commerce One 5.0 platform is less ambitious than previous incarnations. Gone is the vision of helping companies build massive public or private marketplaces backed by a commerce network that would deliver transaction fees to Commerce One.
In its place is a strategy of targeting a wide range of enterprise buyers—from procurement and sourcing managers to CIOs and CFOs—with individual applications that can solve very specific business problems, said Commerce One Chairman-CEO Mark Hoffman.
Even as Commerce One moved away from pushing public exchanges in favor of narrower private marketplaces, the idea was "still not resonating," Hoffman said in announcing the new suite. "A lot of people still flat-out didn’t get it."
Commerce One’s answer is to focus on individual applications, rather than on the larger collaborative platform. "We thought about how you generate short-cycle ROI, payback in six months, and how you solve specific problems."
Commerce One hopes that even if a company buys only a single-purpose application, it eventually will recognize the power of the complete Commerce One 5.0 platform and turn on—and purchase—more functionality.
In another important strategic shift, Commerce One is pushing a new focus on managing so-called business processes—the way that companies actually handle such tasks as approving an invoice or collaborating with trading partners.
This new focus on business processes builds on the company’s existing strength in managing documents and transactions. True support for business processes is the missing link in most b-to-b e-commerce platforms, according to AMR Research analyst Pierre Mitchell. He said such capabilities were "sorely lacking in the market" up to now.
Commerce One 5.0 includes Commerce One Source, the vendor’s e-sourcing platform. It manages the gamut of strategic sourcing requirements, including online negotiation, quotation analysis, supplier performance management, auctions, sourcing intelligence and contract management.
Also in the suite is Commerce One Buy, the platform for which the company is best known. It includes tools for managing procurement and online purchase processes.
Supporting those two main applications is the Commerce One Collaborative platform, which includes tools for managing larger b-to-b interactions, such as transaction management and trading partner integration.
The release of Commerce One 5.0 comes at an important time for the vendor, which has for the most part ended a very close strategic relationship with enterprise resource planning giant SAP AG. The two companies will continue to jointly support their MarketSet exchange platform and work together on ongoing b-to-b integration projects but will compete head-to-head in sourcing and procurement.
Ariba takes similar path
Other b-to-b vendors are treading a similar path. Ariba Inc. went through a high-profile breakup with i2 Technologies Inc. Together, the pair had won some big e-marketplace deals, most of which led nowhere. Today, Ariba has reorganized around the concept of enterprise spend management, or helping companies manage their sourcing and buying processes.
Ariba’s core product in its new suite is Ariba Sourcing; like Commerce One’s new platform, it helps companies manage how they find and acquire goods. Ariba also has a new line of products in the pipeline to expand on its spend management theme, including Ariba Tools, Invoice and Analysis.