16 January 2002 German enterprise resource planning (ERP) software giant SAP has announced that it is scaling back on its strategic alliance with e-marketplace software vendor Commerce One. The news follows weeks of growing speculation of a fall-out between the two companies.

The two companies have been partners since June 2000. A year later SAP also came to Commerce One’s rescue when it pumped in $225 million (€265.7m) to take its stake in the ailing software vendor up to 20%. Commerce One revenues have fallen dramatically as a result of the IT spending downturn during 2001.

That has led to speculation that SAP would acquire Commerce One. However, SAP has increasingly encroached upon Commerce One’s core business with the release of its own business-to-business exchange platform, called SAPMarkets. This was co-developed with Commerce One. It also has the mySAP Technology collaborative commerce product architecture.

Commerce One derives a substantial chunk of its revenues via its relationship with SAP, but because the market for large scale e-procurement exchanges has not taken off as rapidly as expected, Commerce One has had to execute a change of business strategy. It is now targeting smaller, mid-sized companies.

“The market that persuaded us to build this partnership has thoroughly changed,” said SAP spokesman Herbert Heitmann. “We found a way to deal with those market changes and Commerce One, which is a very different type of organisation, must now find its own solution.”

Collaborate:
From friend to foe? SAP/Commerce One partnership questioned (4 Jan 2002)
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