PeopleSoft
is the latest enterprise resource player aiming to supplement
lagging software sales by tapping the business-to-business rush.
The Pleasanton, Calif.-based company today said it is teaming
with business-to-business software maker Commerce One to build
trading exchanges for other companies, using PeopleSoft software.
Enterprise
resource planning companies have made their fortunes selling human
resource, supply-chain management and financial applications to big
businesses. The shift to online exchanges, analysts have said, is a
natural extension of these companies' existing business. Analysts
have estimated that the business-to-business market will grow to
between $2.7 trillion and $7.3 trillion by 2004, from about $131
billion in 1999.
The venture follows earlier
moves by PeopleSoft competitors SAP, Oracle, Baan and J.D.
Edwards in the business-to-business market. Earlier this month, SAP
announced
plans to form a subsidiary focused solely on business-to-business.
Like its competitors, PeopleSoft has been trying new ways to
expand its product line to include e-commerce and other Web-based
capabilities. Earlier this month, the company detailed
its new application service provider division, called PeopleSoft
eCenter. As previously reported, the new division will manage, host
and support PeopleSoft's business applications for start-ups and
larger companies.
"This is very critical for PeopleSoft because their bread and
butter was the human resources product, which hasn't done so well.
They needed to make a strategic move into e-commerce to offset
that," said Harry Tse, an analyst with the Yankee Group.
Business-to-business ventures typically set up an online
marketplace connecting buyers and sellers of products in a specific
industry. Firms with specialized software and online exchanges
promise to drastically decrease the cost of doing business, thereby
increasing profits.
PeopleSoft and Commerce One have teamed
in the past to develop an electronic sales channel for PeopleSoft
customers by integrating the PeopleSoft Order Management module with
Commerce One's MarketSite.
