Covisint switches software suppliers

DETROIT - In a bid to enhance and expand its product offerings, Covisint is replacing software maker Nexprise Inc. with MatrixOne Inc.

The deal is an important step in Covisint's development because it will add more functionality to the automotive industry exchange. It also shows that Covisint CEO Kevin English is not afraid to change technology partners if they do not meet the needs of Covisint users.

The deal calls for revenue sharing, but financial details were not disclosed. MatrixOne had net income of $8.8 million and revenues of $142 million for the year that ended June 30.

Covisint will use MatrixOne software in its Virtual Project Workspace, a subscription-based service that allows suppliers and automakers to collaborate on product development by using interactive, Web-based tools.

Through June 30, Covisint had sold subscriptions for only 500 seats in the Virtual Project Workspace. But English predicts MatrixOne software will become a significant source of revenue for Covisint in 2002 and beyond.

"MatrixOne actually gives Covisint a greater depth of functionality in the design processes," said Karen Peterson, a research director at Gartner Inc., a research and advisory company in Stamford, Conn.

"The thing that's going to drive Covisint much more than anything else is going to be Ford, DaimlerChrysler and GM actually telling their trading partners that they are going to have to do business there and moving their private marketplace collaboration over into Covisint."

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