Showtime for XML
- By Jack Vaughan, John K. Waters
- May 29, 2001
The world is about to become an electronic buyers' market, and General Motors
Corp., the world's largest seller of vehicles, wants to be there. In one of the
most startling initiatives of the young Internet era, GM is going online with
its GM TradeXchange, a Web presence that will match direct and indirect suppliers
to the automotive industry.
The fact is that while modern businesses are computerized, the interactions
between businesses are still ruled by phone, pencil, paper and invoices completed
in triplicate. GM's Web initiative is expected to shake traditional auto parts
procurement processes until buckets of dollars fall to the bottom line.
For business, the promise of automated, streamlined processes - IBM calls
it e-business - is the real promise of the Web, and this is the objective GM
pursues. Others have taken note. Credit Suisse First Boston Corp. estimates
that U.S. firms spend $1.3 trillion on indirect goods and services, and that
the typical manufacturing company spends one-third of its revenue on indirect
goods and services. Small improvements in cost control can mean a lot to a corporation,
and micro-cuts of payments could mean a lot to an e-commerce software service
GM expects the TradeXchange site will reduce purchasing cycle times by automatically
handling purchase authorization, accounting and contracting. Involved is everything
from paint and bumpers for cars to paper clips and computers for knowledge workers.
As is so often the case in online business-to-business undertakings these
days, the eXtensible Markup Language (XML) is part of the story. XML is the
proposed lingua franca for data transfer in the cyber realm. GM's and other
upcoming rollouts represent the end of dress rehearsals and the beginning of
what may be described as preview performances for implementations utilizing
the promising XML format.
XML is helping to move this type of business along, according to Mark Hoffman,
CEO at CommerceOne, the Web start-up that is very much responsible for making
GM's TradeXchange happen.
GM, despite having access to massive IT resources, turned to CommerceOne because
- no surprise here - this all has to happen in Internet time. The unique requirements
of e-commerce (now including XML and online auction capabilities) mean you have
to bring in people with a head start, even if it is only to be measured in months.
The financial terms of the deal - which both parties describe as a 'partnership'
- have not yet been disclosed.
Walnut Creek, Calif.-based Commerce- One has been a visible proponent of XML
for some time now. But the company is truly putting the infant technology through
its paces. Experience with XML has led CommerceOne developers to propose an
XML schema language that is meant to meet some of the perceived shortcomings
of XML in the real world. To look at the issues this schema seeks to address
is to look a little into the future of e-commerce and XML.
But first, how did Commerce- One get this chance at the dance? No doubt it
is due very much to the maneuvering of CEO Hoffman. For Hoffman, CommerceOne
is surely a sweet return to the limelight after a slightly gloomy exit from
relational database star Sybase. In fact, Commerce- One is said to have beat
out Hoffman's old RDBMS nemesis, Redwood Shores, Calif.-based Oracle Corp.,
for the General Motors project. The competition continues. Oracle is at work
on a powerhouse e-commerce site for GM's age-old foe, Ford. Others vying for
this nascent electronic-market niche include SAP, Newton Square, Pa., and Ariba
Inc., Sunnyvale, Calif.
Hoffman set the stage for the GM project by, among other things, buying VEO
Systems, a hotbed of West Coast XML development expertise, and CommerceBid.com,
a builder of complex business-to-business auction and reverse-auction service
solutions. And CommerceOne may well continue to ride the acquisition wave. It
has the purse to make that happen. Its business model calls for a mix of license
revenues and fees collected from transactions. The company has parlayed $10.4
million in third-quarter revenue to a nearly $8-billion capitalization at the
time of this writing.
CommerceOne entered the e-commerce market in two ways, said Mike Micucci,
director of product management. "We first created a Web-based e-procurement
application called CommerceOne BuySite, typically installed inside a firewall
for Fortune 1000 companies. It's used to automate procurement, things like catalog
purchases, workflow management, approval routing - everything to do with automation
of procurement using a Web-based application," he said. The first Web release
was BuySite 4, released in November 1998, he said. By December 1999, BuySite
is expected to be on release 6.
Despite BuySite's promise, Commerce- One recognized that just producing a
buying application did not have much to do with e-commerce. This helped people
to automate their procurement, but it did not do much to integrate them with
their trading partners and suppliers, said Micucci. So, early in 1998, the company
started MarketSite, a business-to-business portal. This was certainly a springboard
for deals like the one forged with GM. MarketSite was used to connect buyers
with all trading partners. In fact, MarketSite is something of a franchisable
portal - under the covers, GM's TradeXchange, for example, is expected essentially
to work as part of MarketSite.
In March 1999, said Micucci, Commerce- One announced MarketSite 3.0, its first
XML-based product. With a hospitable front end in place, the product, said Micucci,
was aggregated as a business-to- business portal.
"As part of that strategy, we wanted to scale this to other portal properties
around the world - using our MarketSite technology - to run a business, recruit
trading partners and execute transactions. We also announced strategic deals
with British Telecom to establish a portal in the U.K. and Europe, and with
NTT [Nippon Telephone and Telegraph] to establish a portal in Japan," he added.
"We have replicated this model around the world, and announced subsequent portals
with Singapore Telecom, and with Cable and Wireless Optus in Australia," said
"What we're doing is linking all of these portals together into a global trading
Web. The idea is that we expand this type of network to help enterprises aggregate
their buying power, and connect them to a network of trading partners [suppliers]
to execute 'B-to-B' transactions and to receive catalog content," Micucci said.
"And then we started to layer on top of that incremental business or e-commerce
Said Steve Viarengo, product manager for BuySite: "All of our products are
evolving to take into account the global requirements of e-commerce on a worldwide
basis. If you look at our strategy and our plan, it's focused on the way e-commerce
is changing the way businesses interact with each other. Barriers are coming
down. You no longer have to go to the supplier down the street. If a supplier
on the other side of the world can meet your price and do a better job for you,
you can buy there. That's the opportunity that e-commerce and the Internet are
bringing to business worldwide."
As to the role of XML, CommerceOne's Micucci said the company realized that
apps that used fixed APIs would not scale on a global basis. "We took a harder
look at the market and we saw that XML was going to become the lingua franca
to exchange information over the 'Net. It was going to allow application-to-application
communication using what we call a 'loosely coupled document model.'"
Thus a partnership with VEO Systems turned into an eventual company purchase.
"VEO was pioneering a 'B-to-B' e-commerce infrastructure around a loosely
coupled document exchange model," said Micucci. "They had already written the
first cut of their specifications. One was called the Common Business Library
[CBL], released in September 1998. They had also created a business-to- business
XML-based transaction server. It was used to exchange XML business documents
in a simple and open way."
CommerceOne's XML efforts will come into developers' hands as CBL, SOX (a
proposed standard for XML schema) and as the CommerceOne XML toolkit for schema
creation. The kit is available as a free download at www.marketsite.net, where
development managers can also see MarketSite in action.
Hello, VEO - Hello, XML
"We ended up partnering with and subsequently acquiring VEO in January 1999
as a basis for MarketSite from the technology standpoint," said Micucci. "We
took the VEO technology and abstracted it to create a lightweight trading partner
integration solution that really is an XML server that allows us to send and
receive XML-based business documents back and forth with trading partners. It
is embedded in our buying applications.
"It's part of our ISV program, so that we have partnerships with PeopleSoft,
RightWorks and Extensity," he added. "On the supplier side, we did the same
thing. If the buying applications are sending XML business documents to the
portal, we had to have a way to send those to the suppliers.
"We have an XML toolkit that suppliers can use to integrate directly into
their back-office or e-commerce systems. We have hosted solutions that, instead
of suppliers installing some software to integrate to their back office to send
and receive XML documents, we essentially have a hosted order management system
that receives the XML documents from buyers via the portal," explained Micucci.
What are the hurdles? What Micucci is seeing is that a lot of the trading
partner community is still coming up to speed in e-commerce. "We're here pioneering
a method of document exchange using XML, and these guys are still coming up
to speed with EDI and other methods that have been used in the past. We recognize
that not everyone is going to want to do full-scale XML document processing.
That's why we have the hosted solutions," said Micucci.
XML in the city
While XML seems a simple scripting language to experienced programmers, its
large-scale implementation will not be without hurdles. Is it ready for showtime?
It is very likely that heavy-duty transaction-oriented undertakings will stress
XML in unforeseen ways.
System architects at CommerceOne, in fact, have pretty much concluded that
XML DTDs, an essential element of enterprise XML, are not adequately robust
for electronic commerce. The XML DTD is a Document Type Definition, a set of
rules for using XML to represent the proper architecture of a document. The
concept comes out of XML's Standard Generalized Markup Language (SGML) roots,
and provides considerable power to the basic XML document type.
Others will find various flaws in XML in diverse settings. That found by CommerceOne
in the XML-in-commerce setting is notable, though not a showstopper, and the
company has proposed an interesting object interface for handling DTDs' programmatic
shortcomings. It is known as SOX, or Schema for Object-Oriented XML.
A sense of the real-world issues that XML solves, and the new ones that it
is just now encountering, emerge when you give a hearing to Matthew Fuchs, senior
architect for XML technologies at CommerceOne, and an author of SOX. Fuchs spoke
on the benefits and challenges of XML in e-commerce as part of last November's
OOPSLA '99 conference in Denver, where, in fact, the intersection of objects
and XML was a major topic.
Fuchs came to CommerceOne as part of the firm's purchase of VEO. At VEO, Fuchs
worked for Jay Tennenbaum, now chief scientist and director at CommerceOne.
Tennenbaum is an XML and e-commerce pioneer known for stints at SRI, Enterprise
Integration Technologies (now part of HP/Verifone) and CommerceNet (where he
still serves on the board). Although Fuchs is grounded in object technology
(he studied mobile object systems as part of his Ph.D. work at NYU) he has also
been a denizen of the so-called SGML swamp.
While working on mobile object technology in the mid-'90s, Fuchs looked at
the CORBA IDL. He needed to be able to move software objects around the Internet.
He wanted the objects to be able to communicate with each other - 'silicon-to-silicon'
in his words. And he also wanted the objects to be able to communicate with
humans - 'silicon-to-carbon.'
Fuchs saw machine-readable SGML, the forerunner of XML, as a simpler, more
loosely coupled approach to this problem, and a preferable choice to CORBA IDL
in the role of meta language for describing agent communication languages.
But SGML was, many observers agree, overly complex. Fuchs soon found himself
among early World Wide Web Consortium (W3C) members seeking to simplify SGML
and to create XML as a Web-based method for handling data. XML answers a lot
of modern systems' needs. But Fuchs has found wedding it with programs to be
Fuchs has continued to work with XML at VEO and now CommerceOne. "We realized
that people were going to be using XML to exchange messages, and that we needed
to build software that would deal with these messages. We had Java programmers
who needed to be able to write the software to deal with these messages. And
we needed to enable them to do so as fast as possible," said Fuchs when ADT
caught up with him at the SIGS XMLOne Fall '99 conference in Santa Clara, Calif.
There is a need to formalize the relationship between markup and code - and
DTDs may not be the best way, Fuchs suggests. "DTDs are monolithic beasts,"
he has said. Also, they are verbose.
Then, too, they may have to be continually written and re-written, which may
seem pointless to modern Java programmers who know that traits can be inherited,
not always written from scratch. With such issues in mind, Fuchs and others
came up with SOX. [Go to www.xml.com/pub/r/SOX_2.0 for specification details.]
The best way to quickly get Java programmers moving with XML messaging was
to express the XML information in a way that mapped naturally into programming
languages, Fuchs said. "The reason you have these object-oriented facilities
and programming languages is that there are some good ideas in there. Those
ideas have legs and are applicable to the issue of how you evolve marketplaces
[like the one CommerceOne has built]. The models are very similar," he noted.
Fuchs et al. built the SOX schema language and toolkit to enhance XML in action.
The schema language describes constraints to be placed on the document. "There
are lots of reasons why schema languages are great," said Fuchs. "They change
the whole nature of how you do things in XML. They make this whole vision work."
SOX tries to provide strong data typing, polymorphism and reusability, where
DTDs may not do so (see "The year for SOX?," below).
CommerceOne's Hoffman points to the usefulness of the SOX schema toolkit as
a handy means of making SOX happen. It is, in fact, a catalyst to the e-commerce
portal business, he commented during an online interview at www.stockhouse.com
"It gives us a standard way to bring on suppliers. Putting that out to the
marketplace and getting people to build catalogs around our XML strategy is
extremely important to us," he said.
Hoffman contends that the company has been very open with its XML development
work, and SOX has been offered as a standards proposal to Oasis, BizTalk and
Steven Jones, vice president of marketing at long-time XML-force DataChannel,
Bellevue, Wash., said SOX is a good effort toward providing a universal description
of data. "It is the Commerce- One language for unifying data," Jones said.
The CommerceOne toolkit was made public in early November. CommerceOne combined
efforts with tool maker Extensibility, Chapel Hill, N.C., to produce this offering.
The firm launched a Web site (www.xmlschema.com) in December intended to provide
online validation of XML schemas.
The tools from CommerceOne and Extensibility join a somewhat shallow pool
of XML tools now being offered by industry. Microsoft has XML Notepad. IBM has
a suite of disparate tools that have come out of the company's AlphaWorks advanced
technology commercialization program. There are others. XML hoopla would have
us believe the technology is ready to thrive - but the depth and range of XML
tools belie such an assertion.
Brick-and-click for GM
Procurement and distribution has been a key to GM's success throughout its
long history. Whole industries and cities were created in GM's wake in the states
along the Great Lakes. In My Years with General Motors, company patriarch Alfred
P. Sloan makes a point of highlighting procurement as an early instance of his
success in bringing together the diverse companies that came to be known as
General Motors. Today, the business is global and GM is betting heavily that
CommerceOne can succeed in its endeavor of creating a powerful virtual market.
"GM will move from being in a smokestack industry to a brick-and-click industry,"
said Harold Kutner, GM vice president and group executive, Worldwide Purchasing.
"This is a way to digitize GM and to digitize our suppliers as well.
"We are talking about a global site of over $5 billion, which dwarfs the other
B-to-B or Consumer-to-B sites that are available today on the 'Net," commented
Kutner at the time of the CommerceOne/ GM announcement.
"Consider the way so-called 'Big Box' marketers such as Home Depot and Sam's
Club changed retailing," he added. "We envision a day not far off when GM [TradeXchange]
is considered the 'Big Box' of wholesaling."
The plan will succeed, indicated Kutner, "not because we're going to tell
our suppliers to do this, but because it's an easier, better and faster way
to do business."
Alan Trufe, executive director of GM TradeXchange, said "we were looking for
a partner to bring two things: enabling technology to link buyers and suppliers,
[and an] understanding of how to facilitate host and manage a trade exchange.
"It's a marriage that's going to work," he said of the GM/CommerceOne deal.
Trufe notes a typical goal of Trade-Xchange would be to reduce the cost of
a purchase order from $100 to something less than $10.
GM is re-making itself to take advantage of the Internet, he said. Of CommerceOne
he said, "we had an aggressive due-diligence program," and the signs turned
up favorably for the Web commerce start-up. Standards are important, he indicated,
saying "CommerceOne gives us an open environment." The GM undertaking may help
drive XML (and not incidentally, CommerceOne), note CommerceOne company representatives.
Said BuySite's Viarengo: "GM is clearly very motivated, and they have motivated
all of their tier-one suppliers.
"This is the 'network effect' working here," he added. "The more large buyers
you bring on board, the more large suppliers you'll bring on board." In fact,
GM has more than 30,000 trading partners.
Meanwhile, the sort of arrangement GM and CommerceOne are forging will spread
throughout the auto industry, admits Robert Marcus, chief architect and director
of technology transformation and deployment for GM's information systems and
services. "Now we're looking at virtual systems across supply chains," Marcus
told an ADT reporter at OOPSLA.
"The Big 3 will have big commerce sites with XML coming in and out," Marcus
This will be a challenge to other companies in the chain. One obvious problem
is that companies are going to have to respond to several car makers, said Paul
Harmon, senior consultant with Cutter Consortium's Distributed Architecture
Service, and editor of the Component Development Strategies newsletter. "The
problem with XML is that it only works if everyone agrees on a standard set
of tags," said Harmon.
"XML is great for passing data, but really doesn't support programming. If
[data] exchange requires some intelligence - as for example, agents that dynamically
negotiate over price - then that's going to require more than XML," he said.
Fuchs and his CommerceOne colleagues think they may have a prescription for
this ill. They also attest that their software strategy will allow suppliers
to interact across trading networks. On each of these points, time will tell;
but this being Internet time, time will tell soon.
For large- and mid-sized organizations alike, new trading partner arrangements
will be key in years to come, said Ted Schadler, group director, Forrester Research,
at Forrester's November 1999 "Beyond e-Commerce Forum." In the Internet economy,
said Schadler, sole-source suppliers will sink companies because they will not
be flexible enough to respond to customer demands. "This is about specialization
and working with others in real time to deliver solutions together," he said.
The year for SOX?
| At November's
XMLOne Fall '99 event in Santa Clara, Calif., Matthew Fuchs of CommerceOne
outlined issues in XML, e-commerce and programming. The different requirements
of modern Internet computing, he indicated, are creating a new approach
to distributed computing.
"The standards and technologies originally available were not particularly
useful for Internet agent communications," said Fuchs. "CORBA, COM, DCOM
and those kinds of systems were intended to enable programs to communicate
with other programs. And the information being passed back and forth isn't
particularly human-readable, nor should it be. It's intended to be passed
back and forth between two programs that have a very tight interface with
each other, with redundancy, and that's the way it ought to be. But that
doesn't work very well for communicating with humans."
XML is useful here because it is expressive. And people can look at
it and figure it out, more or less intuitively. "Certainly, compared with
HTML, you say a lot more about the semantics of what you want to convey,"
said Fuchs. "Yet it's simple. XML is certainly simpler than SGML. XML
is a child of SGML, which is a huge beast.
"XML gives you grammar, it's not just arbitrary strings and expressions;
it's expressions that conform to a grammar, which is usually pretty important.
XML gets down to the core idea of markup. You get validation, so that
when you write applications on top of it, you assume that certain restraints
will apply," he noted.
What Fuchs has encountered in the cyber realm, though, is the need to
sew together programs and documents. On top of this is a need for evolving
Said Fuchs: "If you can't get your systems to talk to each other, you
aren't going to do business. But at the same time, getting your systems
to talk to each other once - right now - only says that right now they
can talk. It doesn't mean that next year it won't be a different situation.
And you can bet that the way we interoperate now won't be the same a year
from now. As you evolve, your requirement to interoperate will evolve
as well. And I think that is a key issue."
These issues led Fuchs to work with others to develop SOX, or Schema
for Object-Oriented XML. Though it is too early to tell, it seems like
a promising approach that combines schema mechanisms with object technology.
Fuchs gave an example of a problem SOX would address. "As a programmer,
I might want to generate a class. Somebody else might like that class,
but need some other stuff, so they want to create a new class that extends
the first one. I want to be able to [extend] documents so that I have
an extended line item that I can use when I do business with people with
whom I have [unique requirements].
"The great thing about having OO-type extensibility features in your
schema language is that you can do that without impacting everyone else,"
As part of his work at CommerceOne, Fuchs and others have developed
the Common Business Library (CBL), a set of business documents all defined
in SOX and supported by the company's MarketSite operation. It includes
invoices, requests for quotes and other useful bits needed for e-commerce.
- Jack Vaughan and John K. Waters