Where do e-marketplaces go from here?

Where do e-marketplaces go from here? "We're essentially at the phase where both the suppliers and the customers or prospects are trying to figure out their next step," says William Brandel, research director for e-business at the Aberdeen Group.

Where do e-marketplaces go from here?

"We're essentially at the phase where both the suppliers and the customers or prospects are trying to figure out their next step," says William Brandel, research director for e-business at the Aberdeen Group.

Surprisingly, many agree on the broad outline of the future, if not the specifics.

Everyone seems to be in accord that the next wave of Net markets will be private, although some observers, like Gartner Group's Andrews, say public vs. private is not a useful distinction.

A private marketplace is a single enterprise's trading partner network.

AMR Research in Boston calls this the "private trading exchange" (PTX) and projects that application license fees and services for such marketplaces will grow 68 percent annually into a $35 billion business by 2005. About 70 percent of that will be fees for services. AMR says a PTX will cost from $50 million to $100 million to build, and the company recommends that any enterprise with revenue exceeding $1 billion start building one now.

Collaboration is the second thing everyone agrees on.

The next generation of Net markets is about collaborative commerce, say the freshly printed marketing materials of major platform vendors such as Ariba Inc. and Commerce One Inc. There are plenty of areas ripe for automation, from new product introductions to supply-chain management.

"There are nearly an infinite number of uses," for collaboration between partners, insists David Kraemer, director of marketing at Extricity Inc., a maker of B2B relationship management software. "It never really ends."

The area generating the initial buzz is product design, which would include the work done jointly by partners to customize a seller's product, such as a circuit board, for a given buyer.

That application encouraged Ariba last January to pony up more than $2.5 billion to acquire Agile Software Corp. The company's Agile Anywhere and Agile Buyer, which are being integrated into Ariba Buyer and Ariba Sourcing, respectively, are designed to let partners cooperate on a product's content, and then source and procure its components. Ariba has since gone back on that acquisition.

That process involves the management of unstructured data, such as three-dimensional CAD drawings or word-processing documents. While that is tougher than managing structured data, like purchase orders, it may prove more rewarding to corporations.

"Trying to control unstructured data is really dodgy," says Narry Singh, VP of global trading and business development at Rapt Inc., a San Francisco-based developer of real-time analytic tools. "But unstructured content is really the intriguing part because it's usually in the first part of the product life cycle that the majority of costs are committed to."

Still, it will take time for companies to be convinced that collaborative product design is worth the massive effort. "It's not one of those things you can give ROI [return on investment] on beforehand," says Andrews. "The most you can say is, 'I think we can improve the process.' That's going to be a tough sell to the board."

That is why Framework Technologies Inc., a developer of software similar in function to Agile's, has surveyed its customers and developed an ROI calculator to measure reductions in product delays and engineering changes.

"Everyone has a sense [that] collaboration has benefits," says Dave Halpert, VP of research and development for Framework. "But I think you can show [ROI] even in six months."

Newsletters

You have been successfully signed up. To sign up for more newsletters or to manage your account, visit the Newsletter Subscription Center.
See All
See All