26 April 2000 - Market researchers at GartnerGroup estimate that by the year 2004 vertical portals, or "vortals," will make up 37 percent of a $7.3 trillion e-commerce business-to-business (B2B) market.
That's nothing to sneeze at.
Likewise, Delphi Group recently forecasted that B2B vortals "will account for $5 trillion in purchases by 2002." Vertical portals are sites where business buyers and sellers of goods and services can convene electronically to improve supply chain efficiencies.
Are aggregators needed?
The biggest players in the vortal space until now have been aggregators of many individual vortals targeted at various industries. For example, VerticalNet.com houses many vortals, ranging from e-dental.com to beverageonline.com. But several new vortals have recently been introduced that will stand completely on their own, rather than being under the wing of a vortal aggregation site such as VerticalNet. The operators of these sites have their eyes on the success achieved by a few other vortal sites catering to single industries, such as e-steel.com.
For example, Chevron has introduced a company-neutral vortal called Petrocosm Marketplace, where it and other players in the oil and gas industry can try to attract large volumes of suppliers willing to offer discounted goods and services in exchange for the opportunity to reach many petroleum industry players in one place.
Niche industry players are following a similar lead. For example, one of the first vortals to be introduced in Europe is leatherXchange.com, where thousands of leather businesses will convene in an online trading environment. The industry players at the site will include slaughterhouses, tanneries, and machinery suppliers, among others.
Likewise, players in the food service and restaurant industries convene at Restaurantpro.com, where restaurants and suppliers can trade products and services. The site was built in response to more than $14 billion in annual losses in the food service industry due to inefficiencies in the supply chain, according to the site's founders. Bank of America and Commerce One, among other companies, are backing the site.
Many vortals, one Place
The vortal aggregators continue to flourish, though. VerticalNet and Commerce One are both adding vortals at a quick pace. And some of the growth of vortals may be driven by the entry of the Web's largest portals into the vortal arena. America Online and Yahoo! both recently announced vortal initiatives. AOL, in partnership with PurchasePro, plans to facilitate large and small trading communities across several online mediums, while Yahoo!, taking a bird's-eye view, aims to function as an aggregator of information from the many vertical B2B communities on the Web.