Rushing to play catch-up with rival ERP vendor Oracle Corp, SAP AG will this week announce plans to create 10 business portals that will link companies, suppliers and customers in online marketplaces.
A source close to the German software giant confirmed reports in the Wall Street Journal and said an announcement about the partnerships was due to be made some time this week. The story broke after the company’s chairman and CEO Hasso Plattner prematurely spoke to a journalist from his estate in Heidelberg, Germany last week.
According to the report, Plattner said one of the portals will host an online marketplace for the German chemical companies Bayer AG, BASF AG and Hoeschst AG. It will enable them to buy non-production supplies such as office products, Plattner said. He refused to give more details about the nine other portals because he said not all the details were yet complete. But he added that the deals would include heavyweights, both in Europe and the US.
The move follows hot on the heels of similar announcements by rival giant Oracle, which last month unveiled a partnership with Ford Motors to create a trading exchange based on its procurement and supply chain technology. At the time, ComputerWire was also told by sources that the company is close to announcing other large deals, possibly with Boeing, American Express and GE Motors.
The idea behind the exchanges is to link large businesses, like Ford, to their suppliers, partners and customers and enable them to do business online by automating the majority of the time- intensive procurement and supply chain operations.
As part of its new internet strategy, mySAP.com, SAP has set up a component called mySAP.com marketplace, which is intended as a general online exchange for any supplier, partner or customer to link into. But since the announcement back in September, the industry has seen a shift away from these types of open, free- for-all exchanges, towards a closer, partnering strategy linking vendors and partners in particular vertical market segments. Oracle is clearly going that way, as are the leading online procurement vendors Ariba and Commerce One (which signed a deal with General Motors for its supply chain). SAP knows it is late to the game and it is now aggressively trying to get a slice of the lucrative online exchange pie.
It had some success last week when Hewlett-Packard Co announced plans to migrate its R/3 implementation to the mySAP.com architecture. At the time, the company said it plans to use the marketplace component to link to its suppliers, partners and customers. The deal is the biggest SAP has signed for its mySAP.com strategy so far and will certainly help give the architecture some credence in the online exchange battlefield.
