Partnerships and then some

Vendors have reached new levels of cooperation on business-to-business e-commerce. The result has muddied product choices.

By Julie Bort
Network World, 02/26/01

By its nature, business-to-business e-commerce is all about partnering. User organizations must negotiate who to include in their online business ventures and how to create the back-end systems that make such ventures happen. This fact hasn't been lost on vendors of e-marketplace and procurement software. Over the past year, they have announced one partnership agreement after another aimed at easing the technology integration headaches inherent in business-to-business e-commerce (and downright obstructive for e-marketplaces).

These software makers have banded together with enterprise resource planning (ERP) vendors, hardware makers, XML-tool developers and integrators. In this rush to partner, sometimes even vendors that are normally considered competitors have locked hands - witness the alliance in which e-marketplace software competitors Ariba and i2 Technologies have been joined by the wishes of IBM Global Services, acting as integrator. While Ariba and i2 publicly claim their marketplace-software products only slightly overlap and are otherwise complementary, most analysts don't agree.

"Ariba and i2 think of themselves as competitors, so their partnership is conflicting," says Laurie Orlov, an analyst at Forrester Research. Despite some differences in features, both companies supply procurement software aimed at building digital marketplaces and enterprise procurement hubs.

Still, IBM wanted parts from one and pieces from another when it shopped around for software to use at the core of its marketplace offerings, says John Wilson, director of alliances for IBM's B2B Solutions practice in White Plains, N.Y. IBM liked i2's supply-chain planning components, but preferred Ariba's infrastructure for supporting indirect procurement, he says, and had no problem stitching those components together with IBM middleware.

This illustrates the good news/bad news center of business-to-business e-commerce partnerships. The good news: Partnerships are evidence that most vendors recognize no product can be all things to all businesses. "We create a product each time we create an exchange," Wilson says.

Even more good news is that opposing forces in this industry find no shame in joining for the common good. The development of the Universal Description, Discovery and Integration specification, which standardizes the process of registering Web sites to create a Yellow Pages-like directory for e-commerce sites for e-commerce sites, serves the point. Although a baby of Microsoft, IBM and Ariba, Commerce One was quick to proclaim support.

Potentially good news is that these dalliances in each other's development labs are more like dates than marriages - none are exclusive; all vendors remain available to integrate their code with others. "It would be naive for any software company to say that it can deliver in a box all solutions for all marketplaces," says Jon Corshen, vice president of corporate strategy for Ariba in Mountain View, Calif.

This is true even for Commerce One, which has received a $250 million investment from alliance partner SAP.

Partners Gist of the relationship Type Date announced Ariba, IBM, i2 Technologies Create e-marketplaces using Ariba and i2 software, and IBM integration services and middleware. Services and product integration; equity investment by IBM in both partners. March 2000 Ariba, IBM, Microsoft Built the Universal Description, Discovery and Integration specification for site registry, now widely supported. (Ariba and Microsoft have partnered since 1999 to integrate products.) Standards. September 2000 Ariba, EDS, WebMethods Provide a software and services package for supplier integration. Services and product integration. September 2000 Commerce One, SAP Jointly built the companies’ next-generation marketplace and enterprise procurement products. Product integration; equity investment by SAP. September 2000 Commerce One, Microsoft Develop and optimize Commerce One software for Microsoft platforms, including .Net. Product integration. Partners since 1998; extended November 2000 i2, BroadVision Integrate i2’s TradeMatrix e-marketplace software with various BroadVision e-commerce applications. Product integration. October 2000 BroadVision, IBM IBM Global Services will resell and implement BroadVision products. Resale and support. September 2000 Clarus, Compaq, Microsoft Integrate Clarus’ eMarket and Microsoft’s .Net enterprise server software on Compaq servers and storage. Compaq Global Services acts as the integrator. Product integration and support. July 2000 J.D. Edwards, Sun and iPlanet (Sun-Netscape alliance) Create e-marketplaces for Sun’s Solaris operating system. Joint development and product integration. June 2000 J.D. Edwards, i2 Integrates i2’s planning and scheduling function with J.D. Edwards' ERP products. Product integration. Partners since 1996, extended December 1999

And that means no vendor gets to dictate your choice for business-to-business infrastructure. Even if you rely on SAP for your financials and ERP, you aren't forced to use Commerce One for supply-chain management. You can pick planning tools from i2, which partnered with SAP years ago, to integrate them into SAP's ERP code. Likewise, you aren't shut out of using Commerce One's BuySite just because you're a J.D. Edwards shop. Thanks to Commerce One's partnership with another e-commerce infrastructure software vendor, New Era of Networks, an off-the-shelf "connector" between BuySite and J.D. Edwards is available.

The bad news is that such flexibility makes picking a product really confusing. For instance, SAP has a marketplace offering, SAPMarkets, based on its joint development with Commerce One. That same basic product is sold as Commerce One's MarketSet, which also targets e-marketplaces. Similarly, Commerce One and SAP sell corporate procurement products - Enterprise Buyer and mySAP E-commerce, respectively. In other words, products from both companies target basically the same users.

More bad news, at least potentially, is that a company that buys into the notion of closely integrated products from multiple vendors can run into support problems. "A partnership of equals and often competitors is like the dance of the Titans - who's in charge?" cautions Forrester's Orlov. "If you're buying software as a result of a loose alliance, you need to have contracts in place for support to last forever and ever."

A much better choice, she says, is to select a vendor and make that company responsible for supporting its partners' products. For example, customers of the IBM-Ariba-i2 alliance usually make IBM the integrator. In any case, don't put yourself in the integrator role unless you enjoy being told by one vendor to call another for support.

Also confusing is when competitors claim the same strategic partners, as is the case with Ariba, Commerce One and Clarus. They all claim that privilege with Microsoft.

"Commerce One has a very deep relationship with Microsoft... SAP, Commerce One and Microsoft collaborate on standards," which by default means that all three do a lot of research and development together, says Mike Micucci, vice president of solutions strategies for Commerce One in Pleasanton, Calif.

The key here is to examine the type of "strategic partnership." Some, such as the relationship of IBM and i2, are deep and include equity investments and the sharing of intellectual property, not just co-development. Others are of lesser value, but still important to the corporate customer: standards development. Then come the vanilla reseller agreements through which one company agrees to sell another's products and engage in cross-training and support.

Above we illustrate some of the various partnerships among vendors in this market.

Contact Signature Series Senior Editor Julie Bort at jbort@nww.com.