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SAPMarkets Steps Out

by Mayur Shah | SAPinsider

October 1, 2000

by Mayur Shah, President of SAP Markets Inc. SAPinsider - 2000 (Volume 1), October (Issue 2)
 

SAPMarkets offers complete B2B online marketplace solutions (in both infrastructure and applications) for both horizontal and vertical marketplaces. In addition, SAPMarkets will provide supply chain analytics and enabling technology for meta markets, which are interconnected marketplaces that enable users to access numerous exchanges at the same time. This article also covers SAP's agreement with Commerce One to build a marketplace suite.

SAPMarkets is headquartered in Palo Alto, California. There is also a German subsidiary in Walldorf. The company employs nearly 300 people. By year's end, that number is expected to reach 450.

     Adding to the excitement surrounding mySAP.com is SAPMarkets, Inc. Announced by Hasso Plattner in March 2000 and formally incorporated in April, our deliverables are complete B2B online marketplace solutions (in both infrastructure and applications) for both horizontal and vertical marketplaces.

     These online marketplaces enable enterprises of all sizes and industries to conduct businesses more efficiently, by dynamically linking buyers and sellers as well as facilitating collaborative engineering across corporate boundaries. In addition, SAPMarkets will provide supply-chain analytic and enabling technology for "meta markets," which are interconnected marketplaces that enable Internet users to access numerous exchanges at the same time.

Why a New SAP Spinoff?

     At first glance, the creation of SAPMarkets might seem counter-intuitive to the larger focus on mySAP.com, but in fact the seeds for this startup were sown when SAP management began to closely examine the numerous possibilities inherent in mySAP.com.

     We saw a big potential for Internet marketplaces, but we felt that it would take a focused "dot-com" mentality to provide our customers with both the technology and the cross-company integration expertise they would need to bring it all to fruition at 'Net speed. We also saw a need to cut across various organizations and geographies in order to serve multiple customers and partners efficiently. It all led to the conclusion that what SAP needed in the Internet marketplace space was an approach rather different than that embodied in mySAP.com - i.e., a small company with the agility and flexibility to move rapidly, and one that could exist and thrive at the cutting edge of the Internet revolution.

Relationship with SAP

      Though SAPMarkets, Inc. was incorporated as a separate company, SAP AG is and will continue to be our predominant shareholder. More important, however, SAPMarkets will collaborate with SAP AG and SAP field organizations on many fronts, from product development to maintenance services. For example, SAP will license technologies to and develop applications with SAPMarkets. In turn, we will develop core marketplace technologies and use sales channels of SAP field organizations to identify and target key customers. This is a mutually beneficial relationship, where SAP gains opportunities to cross-sell or up-sell SAP products, while SAPMarkets taps into SAP's extensive customer base.

Customer Profile

     Our target customers are companies who are developing or plan to develop online marketplaces, both vertical and horizontal, around the world. They include regional players and industry consortia (many of whom are existing SAP AG customers) as well as dot-com startups. The marketplaces could be either the "one-to-many" or the "many-to-many" type.

     But regardless of size, the highest priorities across this customer base with regard to e-business initiatives are speed and functionality. At first, these organizations need speed because they want to stake out their presence in the marketplace and lock in liquidity in a fiercely competitive environment. However, the functionalities we offer, including dynamic and transparent pricing mechanisms, seamless integration with a wide range of services, and access to indirect as well as direct goods, will encourage the "stickiness" - and long-term survival - of a given marketplace.

     In addition, the ability to meet process-focused requirements, to drive efficiencies with buyers and sellers, and to truly leverage the space as a neutral and winning site will all be the keys to success for online marketplaces. So building enabling technology for such marketplaces will, in turn, be the key to our success at SAPMarkets.

     In the new and evolving world of Internet marketplaces, our potential clients are learning as they go. Their aspirations are great, but they lack business expertise, and that's what SAP brings to the table.

     Ultimately, customers will choose to work with SAPMarkets because they will need a reliable and trusted technology provider, one that can provide seamless integration rapidly. And it is universally recognized that SAP has the deep technical and industrial expertise and broad geographic coverage that potential customers are eager to tap into.

     For example, SAP's state-of-the-art direct procurement applications with supply chain capabilities are unmatched by rivals. SAP can offer this capability because of our deep process knowledge. Our competitors have signed many LOIs but have not delivered many marketplace solutions yet. The ability to really deliver on our promises will be our strength.

Opportunities in Store

     The marketplaces that will be the winners are those that are more industry-focused, have locked-in liquidity, provide dynamic and transparent pricing mechanisms, and handle complete order management and supply-chain integration. "Meta markets" are the future of B2B exchanges.

     SAPMarkets is gearing up to seize this opportunity by partnering with the right set of technology and service providers, by developing the right set of applications, by bringing in the best of SAP's technology, by training the field organization, and by closely interacting with market-makers in all industries. In addition, we will continue to take advantage of SAP AG's umbrella marketing campaigns, which will ensure that the B2B theme remains strong.

     E-business is all about speed, partnerships, and new technology. We are rapidly moving to capture marketplace opportunities, forge partnerships with third parties, and assemble new technology components. And as an e-business venture that is moving to quickly capture the lead in developing and serving the online marketplace space, SAPMarkets practices what it preaches.

SAP and Commerce One Join to Deliver New E-Business Marketplace Solution

A new marketplace suite will be the result of a successful joint agreement between SAP and the creator of the Global Trading Web, the world's largest business-to-business trading community.

SAP AG, SAPMarkets, Inc., and Commerce One, Inc., the leader in global e-commerce solutions for business, have made a preliminary agreement to jointly deliver a new e-business marketplace solution for the Internet economy. This marketplace suite will offer companies one-stop shopping for the entire range of e-business marketplace services, ranging from collaborative design through fulfillment.

The companies also will jointly develop a next-generation e-procurement solution based on customer requirements as part of the marketplace suite. The marketplace suite will adopt Commerce One's XML Common Business Library (xCBL), an industry-standard set of XML building blocks, and a document framework that provides open integration with all buying and selling applications, as well as open integration with business applications in every industry. In addition, the companies will extend xCBL to incorporate BAPIs.

As a result of this agreement, customers of SAP, SAPMarkets, and Commerce One will be able to participate immediately in Commerce One's Global Trading Web. With procurement software, all companies running supported SAP enterprise software will be able to connect to the new marketplace suite without upgrading their internal systems.

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