SAP, Telstra splash $20m on virtual marketplace

Telstra will provide the hardware and network infrastructure, while SAP will provide e-commerce solutions such as procurement, supply chain management, CRM (customer relationship management) and collaborative forecasting.

Called mySAP.com Marketplace, it will be hosted by Telstra which approached SAP to do the joint venture.

SAP New Zealand Managing Director Geraldine McBride describes the proposed venture as a virtual version of a bricks-and-mortar marketplace with stalls. Once SAP and Telstra have built the marketplace they will populate it with suppliers and customers.

McBride believes the success of the portal will ultimately depend on the quality of suppliers that come on board and the value that they can offer business users.

Here SAP will be able to leverage the fact that many of its customers are suppliers to various industries. The plan is to be up and running within 90 days and she says she has a number of suppliers and customers interested in taking part.

McBride says SAP and Telstra may also let customers rent their own virtual space within the marketplace. She says the venture is aimed at SAP and non-SAP customers, and at organisations of all sizes.

SAP and Telstra will take a percentage of each transaction, probably around 2 percent. The two companies are still discussing how revenues will be split.

In addition they will set up a solutions factory to customise SAP and third-party software to provide solutions for the portal.

Within the generic marketplace there will be vertical industry markets such as forestry, transport and oil, gas and petrochemicals.

MySAP.com Marketplace also hopes to have discussions with the government about its participation, says McBride.

McBride says she does not see esolutions -- the newly launched e-commerce marketing venture set up by Telecom New Zealand, EDS and Microsoft -- as a threat to mySAP.com Marketplace, using the word "co-opetition" to describe any relationship between them.

"For example we could build solutions with Telecom and take them out to the marketplace," she says.

"There may be a possibility of building ASP-type solutions through a solutions factory at Telecom. Although we are working with Telstra, it doesn't mean we have no other ASPs (application service providers) in the marketplace. No relationships in the e-commerce world are exclusive." Telecom NZ also happens to be a major SAP customer.

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