Siemens picks SAP for cost savings

And Commerce One gets a vote of confidence...

The partnership between Commerce One and SAP, which has been described as troubled and confused in the past, has been given a boost today with the announcement of a global deal with Siemens. The Siemens Power Generation Group claims it is already saving 40 per cent on its process costs by using Commerce One's collaboration platform along with SAP's supply chain software. Siemens will now also use the software to streamline its supply chain activities with suppliers. Catherine Stenson, UK marketing director for Commerce One, told silicon.com that this deal "indicates the momentum of the partnership". But analyst Andrew Ball, analyst at research house Frost and Sullivan, said it indicates nothing of the sort. He pointed out that this aspect of the companies' partnership has always made sense. "Commerce One's platform is known to work well with SAP's supply chain components. This new deal doesn't necessarily indicate the relationship in its entirety is working," he said. Critics have often highlighted the significant overlap in their sourcing software, questioning the validity of the relationship. Ball added: "I doubt whether even Commerce One and SAP understand their relationship now - let alone the poor customers. As SAP steps up its commitment to supplier management and Commerce One is forced to abandon online marketplaces, this confusion will only grow." Commerce One was once one of the darlings of the e-marketplace arena, along with Ariba. But in its latest round of financial results, Commerce One turned in revenues of just $31.8m compared with $170.3m in the same quarter of 2001. On top of this, the company announced its CFO and COO were resigning. Commerce One's Stenson concluded by saying the Siemens deal showed Commerce One is "taking steps forward to a profitable and productive future" and reiterated that there has never been a fall out between Commerce One and SAP.