Commerce One, which makes software that enables companies to automate the buying and selling of goods and services on the Internet, today teamed with steel manufacturer Ispat International. The two companies said they will form a new company to build and operate an online trading exchange for the metals industry.
The new online metal exchange will connect companies that manufacture metal such as steel, aluminum, zinc and copper to buyers and sellers across the industry, hoping to cut internal purchasing and warehousing costs.
Financial terms of the deal were not disclosed.
Large trading exchanges that connect companies with their partners, suppliers and customers over the Internet are a huge piece of the business-to-business (B2B) pie. For example, market research firm Forrester expects U.S. Internet commerce for auto manufacturing to expand to $212.9 billion and computer electronics to reach $295.3 billion by 2003.
Competing head to head with rival Ariba, Commerce One has been busy setting up numerous industry specific trading exchanges in an effort to nab greater market and mindshare in what analysts predict will be an explosive market. Commerce One, alongside database software giant Oracle, is one of the main technology providers to operate the giant auto exchange recently announced with partners Ford, General Motors and DaimlerChrysler.
In January, Commerce One, based in Walnut Creek, Calif., tapped the oil and gas market by teaming with Shell, rivaling Ariba's partnership with Chevron to build Petrocosm, a trading exchange that will connect buyers and sellers in the same industry.
Other similar metal exchanges already exist, such as e-Steel, a marketplace that unites buyers and sellers of steel products online and provides a number of resources for sales and purchasing processes. Services giant EDS and Ariba are also both planning to build several industry marketplaces, including metal.
The new metal exchange, which will use Commerce One's flagship marketsite portal software, will be open to metal producers of all sizes, their suppliers and their customers, allowing them to trade globally, the companies said in a statement. Rotterdam, Netherlands-based Ispat said it is currently in discussions with metal manufacturers to join the exchange.
Commerce One and Ispat said they expect to finalize their agreement by the end of this month.
In other news, Commerce One today said it is working with paper products manufacturer Weyerhaeuser Company to automate its internal purchasing and inventory process for indirect goods and services both in the United States and in Canada. The installation of Commerce One software will begin next month to all Weyerhaeuser North American offices.