Covisint Wins Shanghai GM Contract

Its bubble burst along with the Internet's, but Covisint has reinvented itself and is growing again.

TRAVERSE CITY, MI – Compuware Corp. reveals here Wednesday its Covisint unit has won a 3-year contract from Shanghai General Motors Automotive Co. Ltd. to provide messaging and integration services to the auto maker and hundreds of its suppliers based in Asia, North America, Europe and Latin America.

Shanghai GM, established in 1997, is a 50/50 joint venture between General Motors Corp. and Shanghai Automotive Industry Corp. Group, one of China’s largest auto makers.

Covisint announced plans to open an office in China a year ago, and this is its first major contract in the country. Details on the value of the contract have not been released.

Earlier this year, Covisint won a pact with GM in the U.S. to provide supply-chain software for communication with more than 18,000 of the auto maker’s production and non-production suppliers.

The typical mode of communication Covisint supports includes operations-sharing information on what parts suppliers need to ship today, tomorrow or the following month, as well as information on inventory levels.

Covisint President Bob Paul says the software and services Covisint supplies differ from enterprise and resource planning (ERP) systems that track manufacturing and inventory in the sense that ERP is more involved with what goes on within a specific enterprise, while Covisint products involve more external communications.

“We allow enterprises to share applications and fix problems beyond their firewall,” Paul says in an interview here at the Management Briefing Seminars.

The strategy appears to be working. Paul says revenue growth through the first half of 2006 is up almost 100% from year-ago. However, he declines to give specifics because Compuware currently does not break out the revenues of its subsidiaries.

Covisint was a high flyer during the Internet boom years, when it once was conceived as a major centralized purchasing portal and auction site for auto makers. Its bubble burst along with the Internet’s, but it now is growing swiftly in its new incarnation, expanding its basic communications platform into other fields such as medicine and the oil and gas industry.

One valuable remnant from its past is Covisint’s expertise in offering secure electronic communications. “We figured it out,” Paul says.

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