Users ponder future as Commerce One announces more job cuts

Commerce One's plan to reduce its head count by 400 is weighing on the minds of some customers as the e-commerce software vendor...

Commerce One's plan to reduce its head count by 400 is weighing on the minds of some customers as the e-commerce software vendor prepares for its annual user group meeting in the US next week.

Chief executive officer Mark Hoffman announced the cuts earlier this month, reducing the payroll to just 700 people, down from a peak of more than 3,000 in late 2000.

The layoffs, he said, "will help us preserve our cash position and focus on our dedicated customers".

Commerce One's turnover dropped 78% in the first half of this year and new sales of software licences fell 84%, prompting Gartner analyst David Hope-Ross to suggest that its software development efforts might be slowed.

Hope-Ross said he did not expect Commerce One's technology to disappear. But he added that users should make contingency plans, such as switching to rival vendors or negotiating to take over maintenance of Commerce One's software themselves.

Commerce One's 90-plus European customers include defence manufacturing giant BAE Systems, industrial gas group BOC, and German manufacturing conglomerate Siemens.

Andrew Mellors, capability development director of BAE Systems, who will be speaking at the user conference, said: "We are going to discuss with Commerce One's top people and find out what is going on.

"As far as we are concerned it is a good, capable product that delivers results. We are realistic in our expectations about what we can get from it and look forward to future releases."

Another European Commerce One user, who did not wish to be named, said "We've got a stable production environment with Commerce One and if necessary we can go for the next two years on our own.

"We are, of course, always looking at alternatives," he added.

Commerce One chief executive officer Mark Hoffman insisted the company's financial difficulties would not harm product development. Commerce One 6.0, a Web services-enabled suite of online procurement and sourcing applications, will be out on schedule in 2003, he said.

A European spokesman for the company added: "We're about to begin beta testing and it will be on general release in the first quarter of next year."

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