Covisint quits doing tech deals

CEO says focus shifts to marketing, developing products

At a glance
Highlights of some Covisint software tools

1. Virtual Project Workspace
  • Collaboration Manager: Can link with a 2-D and 3-D visualization tool to view and change engineering drawings
  • Quote Manager: Createsand distributes electronic requests for quotes
    2. Procurement
  • Auctions: Allows for purchaseor sale of products or services
  • Catalogs: Lists productsfor sale
    3. Supply chain
  • Covisint Fulfillment: Allows suppliers to monitor inventoryat a customer's plant
  • Supplier Connection: Allows supplier to receive EDI, or electronic data interchange, information, such as shipping schedules
    4. Quality
  • Advanced Quality Planner: Allows suppliers to manage quality plans required fromeach supplier by the Big 3
    5. Corporate
  • Portal: Enables customersto move from portal to portalwith single sign on

  • DETROIT - Covisint CEO Kevin English says his company is done - at least for a while - striking deals with technology vendors. Its deal last month with software vendor MatrixOne Inc. completes the portfolio of Web tools that Covisint will offer.

    "There's nothing as strategically important in the near future that we'll be announcing to come close to the MatrixOne announcement," English said.

    Instead, the automotive industry exchange will focus on developing and marketing existing products.

    The shift is significant because Covisint's strategy of striking deals with technology companies was a quick way for the exchange to offer popular software to existing customers and to attract new ones.

    There is no guarantee the strategy will work. While some suppliers may think Covisint now has the tools that offer automakers and suppliers some value, others may wonder, "Is that all there is?"

    The new focus will be on what English calls Covisint's building blocks. These are software applications for purchasing, managing a company's supply chain and quality, collaboration during product development and building Internet portals designed for suppliers and automakers.

    Within six months, Covisint hopes to package its independent offerings in product suites, said Mark Duhaime, vice president of product management at Covisint.

    Covisint has some suites - groups of products - but customers also can pay to use individual tools. The amounts vary, depending on transactions and use.

    Next step

    Karen Peterson, a research director at Gartner Inc., a research and advisory company in Stamford, Conn., is not surprised that Covisint has satisfied its immediate appetite for major technology deals. Besides the MatrixOne deal in September, Covisint also struck deals this year with SupplySolution for inventory visibility software and with Powerway for its software to help suppliers meet quality-reporting goals that automakers require.

    "I think they've got their hands full with what they actually have now," Peterson said. "I think they have, if we look at their stated goals of enabling collaboration and procurement, got a lot of the pieces. Now what they have to do is put them together and convince everybody to use them."

    Covisint's challenge now is to integrate the various functions it offers, she said.

    Thilo Koslowski, Gartner's lead automotive analyst, still is leery about Covisint. Covisint is becoming a reseller of existing software tools, he said.

    "They are just combining them, aggregating them into one portal so that you have all these solutions together," Koslowski said. "However, I think that might not be good enough or valuable enough for suppliers and OEMs that already are pretty strong in terms of e-business and have an already established e-business strategy."

    Koslowski thinks smaller suppliers and maybe some smaller automakers might find Covisint attractive. If they opt for Covisint, they do not have to acquire the knowledge, software and hardware needed to develop their own e-business strategy, he said.

    What's in the works for next year?

    New tools coming

    In the first quarter of 2002, Covisint will offer Engineering Manager, a tool in its suite of collaboration products called Virtual Project Workspace. Engineering Manager, from MatrixOne, is a system to manage product data such as computer-aided design files and other data associated with a part or assembly.

    In four to six months, Covisint will offer a community marketplace where suppliers will be able to post their parts and other goods in an online catalog open to any supplier.

    Covisint now allows suppliers to sell their parts and services in electronic catalogs, but the catalogs are accessible only to authorized buyers.

    "In an open catalog, anybody who wants to come in from the smaller suppliers to buy out of those catalogs can do that," Duhaime said.

    Also in the next six months Covisint will offer an electronic request-for-quote link to its electronic auctions.

    "It allows you to not only gather the data and do the initial target pricing but then move that information directly into the auction to continue the price negotiations," Duhaime said.

    One of Covisint's newest products is for procurement. It offers a tool called idle asset management. It contains a classified section to advertise the asset the company wants to sell and an auction to sell the item.

    Covisint is completing negotiations with companies that could provide an asset management service, Duhaime said.

    "They can go in, scour the plants, value the assets and potentially recondition them if that is what's needed," he said. Then the assets would be sold through a Covisint auction, he said.

    "We'll evolve that product to really manage the asset from its initial purchase all the way through its life cycle," Duhaime said. "We haven't found a single customer yet that has a good capital asset management system internally, and we think we can do that and really be able to manage it from the day it comes through the door."

    0

    Shares

    ATTENTION COMMENTERS: Over the last few months, Automotive News has monitored a significant increase in the number of personal attacks and abusive comments on our site. We encourage our readers to voice their opinions and argue their points. We expect disagreement. We do not expect our readers to turn on each other. We will be aggressively deleting all comments that personally attack another poster, or an article author, even if the comment is otherwise a well-argued observation. If we see repeated behavior, we will ban the commenter. Please help us maintain a civil level of discourse.

    Newsletters