Business-to-business e-commerce has become a profitable niche. According to market researchers at ActivMedia Research, over 42 percent of business-to-business Web sites that have been online three years or more say their sites are currently profitable, and 27 percent of business-to-business sites that have been online for less than a year say they are already seeing profits. "We expect that e-commerce between businesses will far surpass that of consumer-oriented sites," says Anne Wheeler, ActivMedia's vice president of information services.
From the widespread effort to equip application service providers (ASPs) with the tools they need to provide business applications on the Web to the effort to overhaul the Web's organization with XML (eXtensible Markup Language), business-to-business applications are squarely in the sights of leading technology companies.
Recently, Microsoft announced that it will provide new tools, servers, and services for the Web and Windows 2000 to help speed the construction of e-commerce applications, including business-to-business applications. Following the release of Windows 2000, expected later this year, Microsoft will update a series of products organized within the company's Distributed Internet Application group.
Visual Studio 7.0, a new App Center Server, and the BizTalk XML Server, will all follow the release of Windows 2000. Microsoft Corp. CEO Bill Gates has been vocal about his view of the XML data transfer and organization standard as the critical "common language" that business applications must speak, and XML will be the common denominator in all of Microsoft's Distributed Internet Application efforts. The BizTalk Server, for example, will help application servers and legacy systems of all kinds talk to Web-based business applications. Microsoft has positioned BizTalk as a sort of business Esperanto for e-commerce applications, including business-to-business applications.
Even as Microsoft works to produce these tools, companies such as Oracle--and now Microsoft itself--are becoming increasingly focused on supporting ASPs, which are shifting the software model away from shrink-wrapped products and toward online applications you can rent.
The rapidly growing success of business-to-business ventures on the Web and the growing volume applications hosted on the Web may lead quickly to a new breed of vertical portal sites. For example, Stephen Watt, CEO of Invisic, has offered enterprise "e-service" and management applications on the Web for some time--mostly aiming to perform tasks common to professionals such as consultants, accountants, and lawyers.
Using Invisic's Web-centric applications, a consultant in any kind of business can, for instance, record time and expenses on the Web and access the information on the Web later. Invisic's Watt says he envisions a Web full of vertical portal sites loaded with these types of Web-hosted applications, targeted directly at professionals in specific fields. For example, a lawyer might record time and expenses via a law-focused vertical portal site.
Says Watt, "Ultimately, we believe a large number of professional services firms will be interested in Web-hosted, self-service applications and vertical portals."