June 21, 2000 4:55 PM PDT

J.D. Edwards signs e-commerce pacts with IBM, Sun

Struggling business-software maker J.D. Edwards today announced partnerships with two computing giants and two other companies in a bid to gain solid ground in the well-touted markets for business e-commerce and application hosting services.

At its annual show in Denver, J.D. Edwards said it made deals with IBM and Sun Microsystems and software makers iPlanet and i2, in its efforts to help businesses build their own online trading exchanges.

The company said it is working to solidify a deal to resell IBM's WebSphere e-commerce suite of software. WebSphere is a set of applications and tools that help companies build online trading exchanges, allowing them to conduct business with their suppliers and partners over the Web.

The two companies have signed a memorandum of understanding and are working toward a definitive agreement. The plan is to sell WebSphere products integrated with J.D. Edwards' flagship OneWorld enterprise resource planning (ERP) software. The combination is designed to help companies connect transactions conducted over online exchanges with data housed in their back-office systems.

J.D. Edwards' deal with Sun and iPlanet--the alliance between Sun and Netscape Communications--will help the companies jointly develop new products and software targeting online trading exchanges.

In May, iPlanet unveiled its new Market Maker framework, which consists of iPlanet's existing e-commerce software, integration services and Web servers. Like others, such as services company Breakaway Solutions and software maker Open Market, iPlanet is trying to offer a quick, easy and repeatable way to help companies develop online marketplaces. Such marketplaces have been described as complicated and still unproven.

Under the distribution agreement with i2, the management software maker will sell J.D. Edwards' OneWorld software suite combined with i2's TradeMatrix marketplace system. In addition, the two companies will begin joint marketing campaigns for the new combined offering.

In recent months, online trading exchanges have been all the rage, primarily among brick-and-mortar companies and manufacturing giants that have banded together to drive down purchasing costs. Participants are hoping to eliminate inefficiencies in the purchasing process by combining their buying power to lower costs when dealing with suppliers.

J.D. Edwards and its rivals, including Oracle, SAP and PeopleSoft, have all been busy trying to nab more lucrative business e-commerce deals as they continue to look for ways to offset what is expected to be slower growth in the market for ERP software. Meanwhile, a number of research firms predict the business e-commerce market will reach $1.3 trillion by 2003--a driving force behind technology providers scrambling to catch a piece of the booming market.

J.D. Edwards and Is the enterprise resource planning market dead?its competitors traditionally focused on ERP software, which automates a company's back-office operations, which include financial, human resources and manufacturing needs. But demand has since skyrocketed in areas such as Web-based customer relationship management (CRM) software and procurement software.

The Denver-based firm has recently suffered from a company-wide reorganization, layoffs and a management shake-up. Last month's layoffs, which amounted to about 13 percent of the company's work force, came on the heels of chief executive Doug Massingill's resignation. In April, Edward McVaney, who founded the company, returned as president and chief executive after Massingill's abrupt departure.

The company is also spreading its wings in the application hosting market. It said it intends to expand its newly established application hosting unit, JDe.sourcing, to serve small- and medium-sized businesses in Europe, Asia, Africa, Latin America and parts of North America, via partnerships with services giants including EDS Taiwan, IBM Global Services and Arthur Andersen.

All of the ERP companies have established some type of application hosting unit in order to gain additional revenue streams by offering their software through various distribution models. Through J.D. Edwards' application service provider (ASP) unit, which launched earlier this year, the company handles the maintenance, management and implementation of its business applications for customers. Customers typically pay a per-month, per-user fee instead of hefty software license fees.

 

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