Covisint Choses webMethods For Integration

Covisint, the online business-to-business marketplace created by leading automotive makers, on Monday said it has selected webMethods to provide software that will act as an on-ramp for members to connect to the exchange as well as enable Covisint's own internal computer programs to work together.

The deal has been one of the most sought after by the top makers of integration software, which enables computer applications and differing systems to communicate.

"If you look at Covisint, it's the key integration real estate right now probably in the world," says Scott Crompton, vice president of automotive at webMethods.

Other integration software vendors, such as SeeBeyond Technology, Tibco Software and Vitria Technology, all vyed for the hotly contested agreement to be Covisint's standard integration platform, says Dan Skrbina, Covisint's lead integration architect.

"A big factor was market share," Skrbina says of Fairfax, Va.-based webMethods.

Under the agreement, webMethods' technologies will be the standard on which Covisint will tie together its internal software programs so that they can work together. WebMethods also will become the channel for which Covisint's customers can tie into the exchange. The agreement includes software and services. In addition, the agreement allows Covisint to resell webMethods' technology to customers that have not yet adopted their own integration platforms.

But a customer will not be required to use webMethods' technology to use the exchange. Webmethods has adapters that can connect to other technologies.

"Part of the reason we went with webMethods was their integration ability to other vendors and other products they can tie into," Skrbina says. "They have a vast library of adapters to other technologies. That's a big part of why we chose them."

Financial terms of the deal were not disclosed. However, Crompton says it is worth "multiple millions" and is renewable. The deal did not involve any equity exchange, just payment and the reseller agreement, which Crompton says he believes would provide an incentive for Covisint to offer webMethods to its customers.

"We'll be targeting and going after key suppliers," he says.

When General Motors, Ford Motor and DaimlerChrysler unveiled Covisint in late February last year, they promised to create the world's largest virtual marketplace by funneling their combined $240 billion in annual spending through the Internet venture.

Suppliers and automakers have posted more than 250 catalogs representing more than 2.5 million items for purchase over Covisint. Europe's No. 2 carmaker, PSA Peugeot-Citroen, has joined online auto marketplace Covisint, but opted for its own design and supply-chain platform to communicate with suppliers, the company said on Tuesday.

The venture, which also counts Renault and Nissan Motor as members, hopes eventually to handle the partners' entire supply and material purchasing budgets, worth more than $300 billion. It has been up and running as an auction platform since September to help members cut supplier costs.

However, the online exchange got off to a slow start. About 1,000 of the 30,000 targeted participants have registered.

Analysts say a big factor hindering momentum is that since its formation in February 2000, Covisint was without a CEO. In April, the consortium named former Credit Suisse First Boston e-commerce chief Kevin English as chairman, CEO and president.

In February, Covisint chose integration vendor Mercator Software to supply software to enable disparate data formats to be transferred from one system to another.

"That was primarily needed in the early days," Skrbina says. "But webMethods will be the guts on the Covisint side."

The deal with webMethods entails the underlying technology that will help participants who use it ultimately tie into each others' supply needs and collaborate on part designs and manufacturing.

On Friday, shares of webMethods traded at $18.80. Like many other technology stocks, shares of webMethods have suffered during the course of the year, presently trading at about 90 percent of its year high of $194.88.

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