Evolving e-marketplaces face ASP showdown

B2B marketplaces could soon find themselves competing head-to-head with ASPs, analysts are claiming today, as they move away from pure e-procurement to service provision and CRM.

They claim the e-marketplace concept is currently poorly understood by businesses, and therefore the potential to use it as to sell services rather than products is being seriously underused. Laurent Lachal, senior consultant at Ovum, said: "ASPs provide software functionality as a service e-marketplaces provide specific marketplace functionality as a service. From that point of view marketplace operators are by definition ASPs." The shift is twofold, according to Ade Ajibulu, analyst with research house Analysys. He said that while B2B platforms will gradually move away from industry-specific procurement to become complete outsourcing consultancies, ASPs will also evolve into more than just software providers. He added: "CRM, supply chain management and knowledge management will be delivered by ASPs within one to two years. A large part of B2B will be delivered via companies using applications stored on one central server and managed by a B2B provider." His view is backed by Kelly Murphy, CEO of recently launched marketplace, Marrakech, which offers an internet-based network linking buyers and suppliers, earning revenue from a percentage-based fee on each transaction rather than from software sales. Murphy claims B2B should be about maintaining and supporting existing supplier/buyer relationships, and not about software. He told silicon.com: "Commerce is based around carefully cultivated business relationships. New technologies provide ways to improve the processes around these relationships but how these relationships are created and maintained will not be changed drastically by B2B. The best B2B technologies have to respect the core tenets of good business practice." Ovum's Lachal added that as the sector develops, the distinct barriers that currently separate B2B vertical markets from other ecommerce players will disappear. He said: "From an ASP point of view, we have ASPs which only provide business application functionality. Other ASPs also provide business application functionality and marketplace type functionality. So an ASP can also be a marketplace operator and a large telecommunications company can be a telco, an ASP and have a marketplace on the side. So it's very complex, very fluid with a lot of partnership, merger and acquisition going on."