Commerce One spins off e-gov

E-commerce vendor Commerce One Inc. completed the spinoff of its e-government professional services division late last week as part of a plan to reduce its staff by nearly half and refocus the company on its core software development business.

The management team of the former Commerce One e-Government Solutions bought the division for an undisclosed sum from the parent company, Commerce One, and will operate the business under the new name Aquilent.

"From our customers' perspective the only thing really changing is the name of the company," said Howard Stern, senior vice president of market development at Aquilent. The company's entire management team will stay on with the new company, Stern said, including the former Defense Department deputy chief information officer, Paul Brubaker, now Aquilent's chief executive officer.

Aquilent, maintaining the same headquarters in Laurel, Md., will continue to focus on three primary areas: electronic procurement systems; Web-enabled applications, including portals; and scientific applications.

Aquilent's customers include the Naval Sea Systems Command (e-procurement), the U.S. Postal Service (portal), and the National Institutes of Health (portal). As part of Commerce One, the e-Government Solutions business booked about $22 million in revenues last year, according to Stern. Aquilent, which will be privately held, employs about 125 people.

Stern said that the newly independent firm should be able to respond even more quickly to customers' changing needs. "Before, the large-company bureaucracy sometimes made it difficult to bring certain skills onboard quickly," he said.

Aquilent will remain Commerce One's "preferred" software integration arm in the federal government and will hold the company's General Services Administration schedule for the Commerce One e-procurement software. Stern said that if a particular customer had requirements for an e-procurement system, that the Commerce One software cannot satisfy, then Aquilent can work with other e-procurement software providers. Possible future plans for Aquilent include expansion into state and local and other national markets, Stern said. For its part, Commerce One announced in October 2001 that it planned to reduce its staff of 2,800 by about 1,300 people. Seven hundred jobs would be eliminated, and the rest of the staff reductions would come through spinning off a number of services operations, including the e-Government Solutions subsidiary.