Oracle toots its own horn in auto-exchange deal
Published: 13 Dec 2000 15:05 GMT
Oracle on Wednesday announced a software-licensing agreement with Covisint, just one day after the giant automobile-industry marketplace signed a deal with its other key technology provider, Commerce One.
As part of the agreement, the software maker will provide its complete Web-based business application suite to handle all of Covisint's internal operations, including sales, marketing and human resources. Covisint will also use Oracle's marketplace software, database and application server.
Oracle, which entered into the Covisint venture through its alliance with Ford, will own an equity stake in Covisint. Financial terms were not disclosed.
The transaction closed earlier this month and will be recognised as revenue in Oracle's fiscal third quarter, which closes 28 February. Because it is in a quiet period, Oracle wasn't expected to unveil details of this agreement until Thursday, the day that it is scheduled to report second-quarter earnings.
On Tuesday, Commerce One detailed its agreement with the auto-industry marketplace.
As part of the deal, Commerce One will provide many of the technologies to run the marketplace in return for an undisclosed amount of cash for consulting services and for a share of the marketplace's recurring revenue. In addition, it will own a 2 percent equity interest in Covisint. The agreement could give founders Ford Motor and General Motors a stake in Commerce One worth approximately $1.26bn.
In recent weeks, Covisint, which has experienced its share of bumpy roads, has been picking up speed in the burgeoning world of online industry marketplaces.
The venture, which also includes DaimlerChrysler, Nissan Motor and Renault, on Monday became a corporate entity, allowing it to begin charging for participation in online auctions. The company, which is still searching for a chief executive, also recently won approval from the Federal Trade Commission.
The marketplace, which is expected to handle several hundred million dollars per year in purchasing, has become a high-profile example of a slew of initiatives by car makers to harness the power of the Internet.
Like other corporations in old-line industries such as steel, aerospace and health, Covisint is aiming to improve communications, cut costs and streamline business among its network of parts makers, buyers, dealers and other key players. Rival carmakers including Toyota and Volkswagen also have tapped into online exchanges and Web sites in an attempt to gain a competitive edge.
Oracle said its marketplace software provides Covisint with functions including security, registration and pricing. Covisint has licensed more than 50 applications from Oracle as part of the deal, including Oracle's latest 9i application server and software focused on business intelligence, data mining, order management, call-center operations and application development.
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