Commerce One Flips its Web Services Switch

By Clint Boulton

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If you were a electronic marketplace proprietor in the late '90s, you were likely confident that you were going to make good money. The prospect that you could build a virtual marketplace, match buyers and sellers in an industry, help them consummate transactions, and make money by charging a small fee might have seemed like a sure bet.

Scores of firms were lining up to use your services to procure goods. But something happened along the way to the bank. The money dried up, and firms like Commerce One, Ariba and Verticalnet, who competed ferociously for new customers, felt the hit. Hard. But in truth, there were other problems. Many of these bold e-marketplace specialists underestimated how hard it would be to integrate all the systems involved because of disparate hardware and software.

So, the time comes to reduce expenses by selling off chunks of your business that were giving you headaches and cutting staff to comply with the wishes of investors fearful of red ink in a decidedly bear market. You do that. You concede defeat and vow to redouble your efforts in the battle to stay alive.

Boiled down, that's the situation Commerce One found itself in. The Pleasanton, Calif. company has retrenched to become a serious Web services player, and if this week's arrival of its bet-the-company Conductor platform is any indication, it's made strides. Still, analysts say it has a long way to go.

Conductor: Making Sure Businesses Stay on Their Rails
Commerce One's Conductor helps companies speed the flow of such business processes as supply chain management (SCM), customer relationship management (CRM) and enterprise resource planning (ERP), making customer and partner interaction easier. Sounds a lot like products integration concerns such as webMethods and SeeBeyond make, right? Not exactly. Conductor is largely different because its features are specifically tuned to Web Services infrastructure (choreographies, routing, transformation).

A composite system, Conductor's architecture makes many applications viewable through a single graphical user interface (GUI). This pares the time and cost of writing and using composite applications, as compared to employing myriad business process management (BPM), enterprise application integration (EAI), portals, identity management and various design tools. This service-oriented approach is the direction many enterprise software firms are heading to stay competitive. The terrain includes larger firms like IBM and BEA Systems and BPM and workflow firms such as Intalio, Oak Grove Systems, Handysoft and Savvion.

Jeff Watts, vice president of marketing at Commerce One, explained some fundamental differences between Commerce One's former approach to e-marketplaces and the current practice his firm is betting on.

"Marketplaces have always been how to implement and execute business processes on the inside of the firewalls and outside," Watts said. "With the composite approach, we are looking at how to run business processes across a system to reach predictable resolutions. It's like a journey across the wilderness."

Watts said a practical application of Conductor in terms of exposing functionality as Web services is in invoice management, where the customer gets the invoice, and needs to reconcile it with the purchase order. Conductor will use appropriate applications to match the invoice against the purchase order to make sure the customer received what goods he was supposed to.

Sanjay Chikarmane, vice president of product marketing at Commerce One, said Conductor provides everything that their MarketSite portal product provided and more.

"MarketSite only provided conducted and transaction," Chikarmane said. "It certainly was useful, but Conductor also provides their customer new services in area of collaboration." He said a difference between Conductor and traditional integration products, is that Conductor adds another layer of connectivity, providing not only integration but BPM and workflow. But IBM has all of these products, right, after its myriad acquisitions, such as CrossWorlds and Holosofx. Well, yes, Chikarmane said. "They aren't unified. You need their Global Services to put it all together." And that costs money.

One aspect that pulls business processes together within Conductor is its Registry. The brain of the platform, Registry defines user and system interfaces as services. It maintains full definitions of user roles and access, systems, business processes, data schemas, transformation maps, choreographies, rules and security requirements. These may be modified as required by the enterprise customer, which Chikarmane said is another key differentiator between its platform and that of rivals, whose systems are hand-coded and must be updated manually. That traditional method costs money and time.Watts said the Registry ostensibly becomes a "storage hub of all moving parts," because software is updating all of the time. "Buying and selling touches every single system. Business systems are not isolated -- applications are linked both internally and externally."

"We allow for the abstract attributes of business processes that can change," Chikarmane said. "Conductor is centralized, so the total cost of ownership is lower for the customer." This was no easy task.

Chikarmane said Commerce One learned to move toward something like Conductor, with its brainy Registry, the hard way. "It was a pain to make changes when you're trying to link 5 applications. Even worse, partners who were connecting had no control within the partner organization. There was no control over what users would do within the enterprise."

Conductor also supports Web services standards, including many of the those that have yet to reach fruition, because that's the way it was written -- to be open to changes reflected by an evolving market niche. For example, in the connectivity layer, Registry supports UDDI and in the semantics level, XML Common Business Library (XCBL). Then there is the layer for business processes. On that score, Conductor supports Business Process Execution Language for Web Services, Version 1.0 (BPEL4WS).

Still, Chikarmane and Watts acknowledge Web services have a ways to go before they are secure and reliable, both key features of business process management. Commerce One brought in Baltimore Technologies and VeriSign for security, Sonic Software for messaging, Actional for integration, Contivo for data mapping, Cognos for analytics and Satyam for systems integration, to bolster its Web services endeavor.

Analysts view
While Commerce One spokespeople are pumped about their new product, analyst opinion varies from enthusiastic to skeptical. It has brought in outside parties, such as

ZapThink Senior Analyst Ronald Schmelzer, who covers the XML and Web services space, said is encouraged by the company's Conductor effort.

"The company is really focusing on the notion of using Web Services and SOAs to build composite applications as the future for their company," Schmelzer said. "Rather than working in proprietary or closed e procurement or marketplace type environments, Commerce One sees that the rapid growth in the adoption of Web Services and SOAs for B2B integration will require the sort of knowledge that Commerce One has gleaned for building composite applications comprised of discrete services. That's the focus with their Conductor platform. But rather than just building a process definition and execution tool, the company is also leveraging their deep knowledge of particular verticals to create processes and documents that meet specific needs, thus offering them a bit of a leg-up on their competition."

Shawn Willet, principal analyst at Current Analysis, said Commerce One could attract existing customers to go to Conductor, and noted the firm can ship the new platform as a basis for a new version of the sourcing/procurement applications and then encourage users to use it for new projects.

But he cautioned Commerce One against jumping into a space where so many uncertainties exist, with so broad a platform.

"It needs to pare down the ambitious plans and narrow its focus. Already it has said it will target a few verticals and that is positive. But it then needs to identify Composite Web Services Applications that are applicable to these markets and concentrate on real business problems and/or industry initiatives in this area where they company may need a new platform (for example, UCCNet). Sample processes, interfaces and templates will be helpful."

As for relying on Web services, Willett said most IT managers are receptive to Web Services and want to cut costs associated with traditional integration solutions and of purchasing new software applications. Commerce One, he said, must respond to those concerns.

Forrester Research may be the most skeptical of all, taking into account the overall struggles the software sector has faced of late. The firm predicted technological immaturity, such as the absence of robust security standards for Web services, will thwart strong Web services platform sales. meaning demand for the Conductors of the world will not take off in 2003 due to technical hurdles such as the absence of robust security standards. Adding salt to the wounds of stymied progress, Forrester expects that CIOs will buy Web services platforms from infrastructure vendors such as like IBM and Microsoft, as opposed to independent software vendors. The research firm conceded Web services will lower the cost of B2B integration, eventually maiking it a lucrative business, but the caveat is that demand for Simple Object Access Protocol (SOAP) messaging across the firewall will take time to snowball.

Commerce One's Watts and Chikarmane said they'll take that bet.