Corio To Host SAP E-Commerce, R/3 Applications

Corio Inc., a leading application service provider for enterprise applications, will offer SAP's Accelerated e-shop E-commerce and R/3 applications, InformationWeek has learned.

The deal signifies a major shift in Corio's ASP strategy. In a previous interview, Corio founder and chief strategy officer Jonathan Lee said the company would offer one enterprise application in each category, spanning customer-relationship management, E-commerce, and enterprise resource planning. The company has been offering ERP applications from PeopleSoft Inc. and Commerce One Inc. E-commerce applications, and it will continue to do so.

Analysts say ASPs will need to broaden their offerings to remain competitive in a market where software vendors are quickly becoming ASPs themselves. PeopleSoft recently revealed it's own hosting initiative, while SAP said today it will spin off a new company that will provide application hosting services.

"This is part of a natural evolution of the market. The vendors all need to have an offering of their own, and the ASPs need to provide expanded offerings to remain competitive," says Joshua Greenbaum, principal for Enterprise Applications Consulting. "It a matter of competitive advantage."

The entry of software vendors such as SAP and PeopleSoft will help the ASP market, Greenbaum predicts. "In the short term there will be confusion and some degree of competition, but by the end of the year everyone will have as many customers as they can reasonably deal with," he says. "In the long run, it's positive to see these vendors in the market because it gives buyers more choice and legitimizes the ASP concept."

SAP is taking this opportunity to strike at Oracle, which launched its Oracle Business Online ASP late in 1998. "Oracle has stumbled a little with its ASP model and is still working out the kinks, so SAP is seizing the opportunity to jump in on the ASP business," Greenbaum says.

Meanwhile, Corio may eventually offer the entire suite of SAP ERP applications. Initially it will only offer SAP's manufacturing applications. "PeopleSoft does not have a competitive offering for the manufacturing industry, which is a core focus for Corio," Greenbaum says. "The deal was a logical one for Corio." The company has not yet signed any new customers for the new applications yet.

The packaged Accelerated e-shop applications will let Corio create an online storefront for customers. The software can accommodate both business-to-business and business-to-consumer processes. Businesses will be able to create a product catalog, track customer profiles and spending habits, manage sales order status, process employee purchase requisitions, and customize the look and feel of Web sites.

Both Corio and SAP were unavailable for comment.

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