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Technology Stocks : Commerce One Inc - (CMRC) -- Ignore unavailable to you. Want to Upgrade?

To: Jerry Miller who wrote (225)	12/18/1999 12:30:00 AM
From: buckhead26	Respond to of 1938

An article from Forbes on MySap SAP suddenly carrying a bigger stick By Lisa R. Goldbaum NEW YORK. 3:40 PM EST-German enterprise resource planning (ERP) software maker SAP (nyse: SAP) has finally grown tired of being called a dinosaur. After months of negative press concerning disappointing earnings, botched software installations and key executive defections, the company is now starting to gain some momentum, even on Wall Street where its once-stagnant American Depositary Receipts have spiked nearly 50% during the past few weeks. The company has made some moves recently to polish its tarnished image. Perhaps most important, it signed on Hewlett-Packard (nyse: HWP) for its mySAP.com e-business solutions, validating what is now SAP's most important business initiative. Today the company gained some vertical market momentum for mySAP by announcing that it's building a marketplace for material repair and overhaul supplies with chemical and pharmaceutical giants including BASF and Bayer. In addition, Neoforma.com--which provides business-to-business e-commerce services in the area of medical products and supplies--has chosen mySAP.com to build a multibillion dollar B2B supply chain exchange for the health care industry. The company is also trying to become less dependent on its rivals. Today it said it picked Microsoft's (nasdaq: MSFT) SQL Server as its primary database for the Windows platform, replacing archrival Oracle (nasdaq: ORCL). Only last week, the company ditched Oracle for IBM's (nyse: IBM) DB2 as its preferred database. Oracle is perhaps SAP's most powerful rival at this point, since it competes in several key areas for SAP, including its core ERP back-end technology and the newer but potentially explosive market for online B2B marketplaces. Clearly the resurgence in the company's confidence is coming from the mySAP.com initiative, the importance of which was highlighted last week when the head of the mySAP movement, Christopher Larsen, was promoted to president of SAP America. The company has been roundly criticized by investors, competitors and even potential customers for being late to the B2B marketplace party. Even Larsen admits that when SAP walks in the door of potential customers--even those that already use SAP products as their ERP backbone--those customers are often more familiar with the e-business marketplace offerings from competitors like Commerce One (nasdaq: CMRC), Ariba (nasdaq: ARBA) and Oracle than they are with mySAP. "With some suppliers, the education on their products is better," Larsen said. That's why the company will kick off a major advertising campaign during the first quarter of 2000 that will begin with television ads followed by print, billboard and Internet ads. The company is also making what Larsen calls a "considerable investment" in teaching its sales force to get the message out. Nevertheless, SAP faces enormous competition from nimble competitors Ariba and Commerce One, which have become powerful forces in the B2B marketplace arena and have amassed huge stock valuations that enable them to make deals like the big boys. Just today, The Wall Street Journal reported that Ariba is in talks to acquire privately held Tradex Technologies for about $1.65 billion. If Ariba does complete the deal, it will give the company better market and exchange creation technology than it currently has and will significantly bolster its online marketplace offerings, analysts said. And Commerce One--which recently scored a major coup in landing a contract to build an online marketplace for General Motors (nyse: GM)--announced more customer wins today, nabbing Canadian banking powerhouse Toronto Dominion and Mexican financial giant Grupo Financiero Banamex-Accival and giving the company some vertical leverage of its own. But while Commerce One and Ariba may have gotten a head start and some early mind share, SAP has one very powerful weapon at its disposal: a huge installed base of customers that use its ERP software to run many critical business functions. "They have the money and developers to throw around, and a critical mass of large companies," said Bala Srinivasa, an analyst at Pacific Growth Equities. "SAP still has the largest installed base among Fortune 500 companies." That's why Larsen believes SAP can ultimately convince companies that it can provide better integration and a more end-to-end purchasing solution than the likes of Commerce One and Ariba. In fact, Larsen claims that one large company was preparing to go with one of its competitors, and SAP ended up winning the deal after "educating" this customer on mySAP.com. He would not disclose the name of the company. That means Oracle may be the bigger threat to SAP, since it too has an existing installed base not only in ERP, but also in databases, integration software and other areas. Oracle also recently scored a major victory when it landed a contract with Ford Motor (nyse: F) to build an online marketplace. Like SAP, Oracle's got the resources and the developer manpower to lure large customers looking to establish an online marketplace presence quickly. "That's why Ford went with Oracle," Srinivasa noted. SAP will certainly have its work cut out for it in trying to match its competitors in technology, innovation and especially momentum, but recent signs indicate it's at least prepared to put up a good fight. buckhead26 disc - own cmrc.