Commerce One Drops Price Of Procurement Software

One day after filing for its initial public stock offering, Commerce One Inc. cut the price of its Web-based procurement software and continued its transition to a services-based revenue model.

The company trimmed the highest price for its BuySite application from $4 million for 40,000 users to $2.5 million for unlimited users. The lowest price remains $500,000 for 500 users. "We're not interested in an ERP-like pricing model," Commerce One president and CEO Mark Hoffman said at a press conference yesterday at the Internet & Electronic Commerce conference and trade show in New York. "We prefer Internet-based pricing because we want to stimulate usage. We don't want the up-front price to be a barrier."

Commerce One wants to drive more transactions to its recently unveiled MarketSite online business-to-business marketplace. To that end, the company also rolled out a hosted edition of BuySite for commerce service providers, who will pay about $1 million to host the application for use by small and medium-sized businesses. The first service provider to do so is Computer Solutions & Finance Group, a British systems integrator and reseller.

Commerce One also unveiled BuySite 5.0 Enterprise Edition, a new version which includes expense-reporting capabilities from Extensity Inc. and the PowerPlay and Impromptu OLAP-based data analysis tools from Cognos. The firm announced three new customers using BuySite for procurement: Booz Allen & Hamilton, Promus Hotel Corp., and Sabre.

Commerce One and archrival Ariba Inc. both revealed plans for IPOs on Monday, and both revealed heavy 1998 losses in registration statements with the Securities and Exchange Commission. Commerce One lost $24.6 million on sales of $2.6 million, and Ariba lost $10.95 million on $8.4 million in revenue.