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Commerce One/SAP Pipeline Overflowing

The partners have a few extra industry exchanges in the works.

SAN FRANCISCO -- The

Commerce One

(CMRC)

and

SAP

(SAP) - Get Report

pipeline has more in it than anyone expected.

There's been plenty of talk in the B2B sector recently that the partners were about to come out with two new industry exchanges, places where companies buy and sell goods on the Internet. In fact, they have four others in the works that will use their jointly developed software, according to Chuck Donchess, Commerce One's chief strategic officer.

"We've got four more that are done that

haven't been announced

and are very large across very major verticals," Donchess said in an interview after giving a presentation at the

Robertson Stephens Internet Conference

here Wednesday. (For a conference calendar, click

here.)

He declined to say what industries the exchanges will focus on or when they'd be announced. But he said they were on scale with past Commerce One deals and would run on

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, the new software the company has developed with German software maker SAP. Since announcing an alliance in June, Commerce One and SAP have announced two exchanges they're setting up with that joint software, one in the mining and metals industry and the other in the energy sector.

"We've already won six together, but only two have been announced," Donchess said.

During his presentation, Donchess highlighted his company's business model, which emphasizes recurring revenue by providing services and network access to its customers. That's different from the upfront licensing fees that software companies have traditionally charged.

At the conference Tuesday, Commerce One competitors

Ariba

(ARBA)

and

i2 Technologies

(ITWO)

also stressed the recurring revenue aspects of

their business models . Both companies, though, have built their businesses largely around upfront licensing fees.

Concerning that discrepancy, Donchess wasn't one to hold his tongue during his presentation.

"Any company that has built itself up on upfront licensing fees, which is something our competitors are doing but calling it something else -- any company that has done that, at some point or another,

hits the wall when they

reach a certain point," Donchess said. "We personally believe that ours is the business model for online marketplaces in the future."