PeopleSoft Inc. is moving into the online procurement market this week, thanks to a partnership with Commerce One Inc. PeopleSoft says it has made an $8 million equity investment in Commerce One, as well as an eight-figure "royalty investment," but was not clear on the details.

The Commerce One technology lets companies purchase office supplies, raw materials, and repair parts via the Internet. The vendors say the technology will be integrated into PeopleSoft's newly launched PeopleSoft Business Network. Ideally, PeopleSoft users will be able to order goods and services directly from their desktops, thus reducing purchase-time cycles and facilitating the flow of goods from supplier to customer.

Enterprise resource planning rivals SAP and Oracle have already introduced their own E-procurement engines. E-procurement, pioneered by such companies as Ariba Inc. and Commerce One, is a hot market, and ERP vendors hope to grab a piece of it to revitalize their slumping sales.

The deal between PeopleSoft and Commerce One comes as a bit of surprise, given that SAP also has an equity investment in Commerce One. But that relationship seems to have cooled since SAP launched its own E-procurement application in May.

PeopleSoft says it will begin work on further joint development efforts with Commerce One. It will also take full responsibility for selling the Commerce One software into its existing customer base.