Commerce One: Struggling Pioneer No. 1

 
 
By Kim S. Nash  |  Posted 2002-05-15
 
 
 

Times are hard for Commerce One.

PDF Download The company was founded to create business-to-business marketplaces, which were once hailed as the future of how companies would buy and sell from each other: sleek, efficient, online. Most electronic exchanges disappeared during the Internet crash; Commerce One nearly disappeared with them.

The company has cut 65% of its staff since October. This month, its chief operating and financial officers both resigned.

Commerce One still operates online marketplaces at commerceone.net. But it also has been working to sell its e-procurement software to large corporations to reduce its reliance on marketplace business.

For example, Schlumberger, a $13.7 billion oil services company, threw out its electronic data interchange system and now lets employees buy office supplies via their PCs using Commerce One software.

Quadrem, which provides marketplace software and services to mining and metals firms, says Commerce One listens. For example, it has changed its software to better connect to various enterprise resource planning products.

Indeed, one reason Quadrem chose Commerce One was its relationship with SAP, says Quadrem chief technology officer Ian Hollingworth. SAP has used Commerce One technology in its software since September 2000.

Exostar, an aerospace marketplace built on Commerce One software, gets star treatment from Commerce One, with Commerce One's top executives frequently checking in. That's partly because Exostar is huge, with 8,000 suppliers and more than 200,000 catalog items.

"If Exostar fails, it's a reflection of Commerce One's entire business model," says Ludo Van Vooren, vice president of communications at Exostar. "It is in their interest to help their most visible customers succeed."

Commerce One's problems—evident in a stock that has been stuck at $1 a share—have prompted speculation that the company may eventually be acquired. Should that happen, Exostar, at least, has a plan. Last year, it rebuilt its exchange so it could switch out the underlying software engine if it had to, with minimal disruption to users.

Says Van Vooren: "We're not going about [this] with our eyes closed."


Commerce One
4440 Rosewood Dr., Pleasanton, CA 94588
(925) 520-6000
www.commerceone.com

Ticker: CMRC
Exchange: NASDAQ
Employees: 1,100

Mark Hoffman
CEO
Hoffman will assume the duties of president next month when Dennis Jones resigns after two years on the job. Hoffman previously was CEO of Sybase, a database company he cofounded in 1984. Holds a BS in engineering from West Point and an MBA from the University of Arizona.

Alexis De Raadt-St. James
Chief Strategy and Marketing Officer
Before joining last August, she was a Fellow at the Massachusetts Institute of Technology studying global technology management and systems design.

Key Products:
Commerce One 5.0 suite for linking to trading partners, Commerce One Source, Commerce One Buy, Commerce One Collaborative Platform.


Reference Checks

Quadrem
Ian Hollingworth
Chief Technology Officer
(972) 543-7900
Project: Used Commerce One and SAP software to build an online purchasing platform for the metals and mining industry.

Schlumberger
Alain-Michel Diamant-Berger
Manager, Procurement and Logistics Business Systems
(713) 747-4000
Project: Has done $1 billion worth of procurement online with Commerce One software. Went live in June 1999; has 3,300 users in 77 countries.

Covisint
Dan Jankowski
Senior VP, Global Communications
(248) 827-6000
Project: Covisint is an online marketplace founded by carmakers DaimlerChrysler, Ford, GM and Renault. Commerce One and Oracle provide critical technology and own part of the marketplace.

Idacorp
Crystal Smith
E-Procurement Technical Support Analyst
(208) 388-2200
Project: Idaho's major power company runs a trading exchange with its suppliers based on Commerce One software. It plans to link the exchange to other parts of its supply chain this year.

Exostar
Ludo Van Vooren
Vice President, Communications
(703) 561-0500
Project: An online exchange for aerospace and defense firms with over 8,000 suppliers.

Eastman Chemical
Alison Page
E-Procurement Specialist
(423) 229-2000
Project: Commerce One user since 1999; application spans North America and Asia-Pacific region; plans to upgrade this year.

Executives listed here are all users of Commerce One's products. Their willingness to talk has been confirmed by Baseline.