SAP drills for business in oil industry

SAP will team with giant crude oil supplier Statoil to create an online marketplace for the natural fuel industry.

2 min read
SAP said today that it will partner with giant crude oil supplier Statoil to build an online marketplace for the natural fuel industry.

Using its mySAP.com software, SAP said it will build the exchange and provide hosting services for oil and gas companies that want to buy and sell goods and services on it. Statoil, the world's second-largest supplier of crude oil, said a select number of suppliers will test the marketplace before its expected launch in the second quarter of this year.

SAP's news comes as the German software giant and its competitors are scrambling to adjust their strategies in a software market that has changed markedly as customers shift their strategies to the Internet.

Joining its competitors--including Oracle, PeopleSoft and others--SAP is providing the plumbing required to support e-commerce communities as the market for business-to-business e-commerce grows. Smaller, nimble companies including Ariba and Commerce One are also racing to build Net marketplaces for customers. Last week, Commerce One said it would form a joint venture with Royal Dutch/Shell to build a Net marketplace for the oil, gas and chemicals industry. Ariba is building an exchange with Chevron that will be called the Petrocosm Marketplace.

Today's deal is the latest in a series of SAP plans to build marketplaces for industries including health care, chemical and pharmaceuticals. The company is partnering with Neoforma.com to create a global exchange for the health care industry. It announced similar plans for the chemical and pharmaceutical industries with companies including BASF and health care equipment manufacturer Siemens.

With 2,000 customer sites in the chemical industry alone, and 20,000 total, AMR Research analyst Scott Latham said SAP has a chance to build some huge exchanges, though it faces key challenges.

"SAP in the next year will be focused solely on getting its installed base online," he said. "That's a pretty high hurdle," and a multimillion investment for the customer, he said.

The mySAP.com marketplace for the oil and gas industry will be open to all companies in the industry. It will initially focus on buying and selling of maintenance, repair and overhaul of goods and services, including spare parts, equipment and oil field services, the companies said.

The marketplace, like many Net marketplaces, is intended to help buyers reduce transaction costs and help them obtain up-to-date product information. For sellers, benefits include lower costs of sale, reduced transaction costs and reduced marketing cost.

In other news, SAP said its flagship R/3 enterprise resource planning (ERP) system is now generally available on Linux operating systems. SAP also said it will deliver additional mySAP.com software components--including its business information warehouse product and business-to-business procurement software--on Linux in the first half of this year.