E-marketplaces: Not dead after all
While many tanked, others are worthy of cautious optimism.
By
Julie Bort
Network
World, 02/18/02
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Business-to-business e-marketplaces have not crossed over from the emerging to the established but signs point to that happening. The Global Trading Web Association (GTWA), a worldwide consortium of 33 for-profit e-marketplaces including Commerce One, Forest Express and Sterling Commerce, reports that the number of transactions for members increased more than 700% from the first half of 2000 to the same period in 2001. In November, the GTWA anticipated 2.2 million transactions in 2001, with year-end revenue of more than $6.2 billion. Sales revenues of about $115 million in the first half of 2000 grew to more than $3.7 billion in the first half of 2001.
As companies discover the intricacies of supplier e-commerce, they find outsourcing it to e-marketplaces ever more attractive, says Sandy Kemper, CEO of eScout and GTWA president. "Electronic commerce is more difficult than we thought it would be. Categorizing, standardizing and supplier adoption are difficult - that is what is driving marketplace adoption."
While the GTWA statistics show a rosy big picture, skepticism of any particular e-marketplace is still healthy. Caution is a good idea until e-marketplaces show unmistakable signs of maturity: consolidation among them, high rates of adoption among the available customers and slower growth rates. Until then, if seeking to shed the administration of supplier e-commerce to an e-marketplace, look for those that require no long-term commitments and minimum work for the network connection.
Meanwhile, incentives remain high to build one's own supplier management system. "We didn't want to train people to go to 100 different Web sites to do their shopping. We wanted to have our own site - one site - where all our preferred suppliers were," says Dan Engdahl, project leader for e-procurement at Interstate Bakeries in Kansas City, Mo.
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