Commerce One and Microsoft seek suppliers

Marketplace builder Commerce One and others have been busy launching industrywide trading exchanges for buyers only to suddenly realise, like the parents in the movie Home Alone, that they left behind the most important member of the e-commerce family: the suppliers.

Seeking help to recruit suppliers into e-marketplaces, Commerce One forged a deal with Microsoft, which was announced last week at Commerce One's e-Link 2001 customer conference in New Orleans. In the collaboration, Commerce One will integrate its MarketSite platform with Microsoft's BizTalk Server technology.

Product plans include a gateway to allow any application developed on the Microsoft BizTalk Server framework to work with Commerce One's MarketSite product. The alliance includes a connectivity application to process rules for the exchange of information and business documents using any product built on the BizTalk framework. The products, now in pilot, will be available in June.

Microsoft has already established relationships with a wealth of businesses of disparate sizes. "On our side, we were in reverse position to Commerce One. We spent a lot of time with our customer suppliers to build Web sites, accounting applications, Office, and mail," said Becky Kaske, director of retail and supply chain at Microsoft's Enterprise Solutions Group.

During a keynote address at eLink 2001, Commerce One CEO Mark Hoffman admitted that, although there may be hundreds if not thousands of large corporate buyers, there are literally millions of smaller suppliers that have been slow to adopt e-commerce. "We are going to work with [Microsoft] to go after suppliers to help them connect to the business Internet," he said.

Hoffman pointed to the failure to gain supplier support as a key reason why the e-commerce "takeoff has been slower than expected."

Another Commerce One executive sounded an even more somber note, saying that without enough suppliers onboard, marketplaces cannot gain the liquidity needed to survive. "We weren't seeing the viral effect that we need to do this," said Mike Micucci, vice president of solution strategy at Commerce One, in Pleasanton, Calif.

But as Commerce One moves closer to a Microsoft platform, users of MarketSite's current back-end connectivity partner, webMethods, fear they will be left out in the cold.

"What concerns me with this deal with Microsoft is that they may start developing BizTalk-specific protocols," said Clay Siemsen, manager of e-business initiatives at Boise Cascade Office Products.

One analyst said it remains to be seen how existing Commerce One customers will respond to the heavy Microsoft environment BizTalk will promote. "Microsoft is not necessarily big on operating in non-Microsoft environments. Buyers and sellers represent multiplatform requirements," said Laurie Orlov, research director for e-business applications at Forrester Research Inc. in Boston. "The question of the day is, has Commerce One taken a step back to answer their customers' needs? There may have been a bit of a functionality loss here that will have to be shored up with integrators."

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