Application service provider USinternetworking Inc rounded out its hosted e-commerce offerings yesterday by partnering with Ariba Inc to offer its on-line procurement software as a hosted application service. Although the deal isn’t exclusive, Laura Crandon, USi’s director of e-commerce products, said the ASP would push Ariba’s software as its preferred procurement offering. News of the agreement sent USinternetworking shares up $13.5625, or nearly 23%, to close at $73.25, while Ariba jumped $12.3125 to $200.3125.
Crandon said the deal plugged the final hole in USi’s e-commerce portfolio. Already the company offers Broadvision’s One-2-One Commerce and Microsoft Corp’s Site Server Commerce Edition on the sell side, but up to now, the ASP had lacked a procurement (or buying) piece. Ariba’s ORMX offering enables companies to streamline their purchasing operations from requisition to payment by aggregating company-wide spending and directing it to preferred suppliers via the Ariba network platform.
Being able to host both the buying and selling software sides will enable the ASP to elbow its way into the burgeoning on-line business-to-business e-commerce and marketplace space. Already, companies like Oracle Corp and rival SAP AG are making a huge play for the B2B e-commerce space, announcing web-based exchanges that link partners, customers and suppliers in on-line electronic marketplaces.
According to Forrester, that market will be worth about $1trillion by 2003 and now we have the software to offer those services on a hosted basis, Crandon said. To that end, under the terms of the deal, she said that suppliers already in Ariba’s e- commerce network will be able to access USi’s sell side applications to transact with buyers through the network using the cXML standard.
Crandon said USi had chosen to partner with Ariba, as opposed to other rivals, including Commerce One or Clarus, because it considered Ariba’s ORMX product to be the best in its space. She said the company was currently working out how it would bundle and charge for the service, but added that it would likely be the same as for its other rented applications. Under that scenario, customers pay a monthly fee to rent a bundle of hardware, software and implementation services. á
