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By Joey Gardiner, 29 March 2000 00:30

NEWS Commerce One has signed a deal to build an online marketplace for the global aerospace and defence industry, serving a business-to-business (B2B) market worth at least $400bn a year. The deal is a joint venture with industry leaders Boeing, BAE Systems, Lockheed Martin and Raytheon, and will include the procurement of everything from manufacturing parts to business services, such as catering or telecoms. The four companies alone have yearly procurement budgets totalling $70bn. However, Commerce One is keen to extend the marketplace to other players. Phil Condit, CEO of Boeing, said the deal will revolutionise the aerospace industry. "The fragmented nature of the industry means there is an enormous opportunity to get more efficient, which this will enable," he said. Paul Taylor, Commerce One VP and general manager EMEA, said: "This is one of the biggest deals that we've done. We're doing a series of mega-portals - this is the latest we've announced. We've announced General Motors, Shell, Citibank, in auto, finance, oil and gas, and now of course aerospace." The marketplace is being run as a joint venture, in which each of the partners has a stake. Commerce One - which will provide the technology - will own five per cent. In addition to software licensing revenues, it will make money by taking a cut of every deal done on the system. The company will be run by an independent board, which will determine charges per transaction. Rouzbeh Pirouz, CEO of Mondus.com, which runs a similar service for SMEs in the UK, said the companies should have no difficulties getting the suppliers to play ball. He said: "The leverage exists from buyer to supplier - once a company realises it will be at a competitive disadvantage if it doesn't offer this service, it generally takes it up very quickly."