From Detroit Free Press
DETROIT — It’s a new day for Covisint.
The once-hyped technology company made its debut as a part of Compuware Corp. this week at an auto industry conference as a staff armed with smiles and matching blue shirts pitched Covisint’s communication systems and Web services to auto suppliers.
With its parts-auction days long gone, Covisint now sells new services to smaller auto suppliers, is on track to meet revenue expectations and has its sights on expanding to more industries.
“The industry should forget about the old Covisint and take a close look at the new Covisint,” said Thilo Koslowski, lead automotive analyst for Gartner Inc., a Stamford, Conn.-based research firm, who said he was critical of the company when it launched in 2000.
Birthed by automakers, Covisint was expected to transform the way carmakers and suppliers conduct business mainly through an online auction for parts, messaging and Web services.
With that tall order came an expectation that automakers and suppliers would sell $240 billion in parts through Covisint.
But suppliers didn’t take to the auction, and some thought it was the automakers’ way to drive down prices. In the two years before Compuware bought Covisint, the auction posted more than $50 billion in activity annually.
“It never achieved the position it was talking about. That’s why it was so important that the company reposition itself,” Koslowski said.
The auto auction part of the business was sold in December. The rest, the more technical side of Covisint, was sold to Compuware this year for $7 million.
Since then, revenue figures have scaled back since its early days, when numbers like $5 billion were tossed around. Covisint is on track to meeting its fiscal 2004 expectation of $25 million.
The company has long-term plans to expand outside the automotive industry and eventually move the revenue target up to $100 million.
Covisint now counts General Motors Corp., Johnson Controls Inc. and Lear Corp. as customers of its messaging system. DaimlerChrysler AG and Ford Motor Co. use its Web services, which connect suppliers and carmakers to each other’s Web sites.
Copyright 2004 Detroit Free Press. All Rights Reserved.
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