the global b2b arena
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The Global B2B Arena. James MacAonghus Analyst, Jupiter MMXI. Agenda. The Heavyweights: Industry Sponsored Markets The State of Technology Early Days in Europe. The Heavyweights: Industry Sponsored Marketplaces. ISM Progress Should Follow Key Steps. Establish leadership - PowerPoint PPT PresentationTRANSCRIPT
© 2001 Jupiter MMXIJupiter
The Global B2B ArenaThe Global B2B Arena
James MacAonghusAnalyst, Jupiter MMXI
© 2001 Jupiter MMXIJupiter
AgendaAgenda
• The Heavyweights: Industry Sponsored MarketsThe Heavyweights: Industry Sponsored Markets
• The State of TechnologyThe State of Technology
• Early Days in EuropeEarly Days in Europe
© 2001 Jupiter MMXIJupiter
The Heavyweights: Industry The Heavyweights: Industry Sponsored MarketplacesSponsored Marketplaces
© 2001 Jupiter MMXIJupiter
ISM Progress Should Follow ISM Progress Should Follow Key StepsKey Steps
1.1. Establish leadershipEstablish leadership
2.2. Form a separate legal entityForm a separate legal entity
3.3. Establish a capital structureEstablish a capital structure
4.4. Select a technology vendorSelect a technology vendor
5.5. Create business and revenue modelsCreate business and revenue models
Page 3 of 22
© 2001 Jupiter MMXIJupiter
ISMs Make Significant Progress ISMs Make Significant Progress Towards Live TransactionsTowards Live Transactions
75% 75%66% 62%
53%
0%
20%
40%
60%
80%
100%
SeparateLegal Entity
TechVendor
CapitalStructure
BusinessModel
Leadership
% P
assi
ng
Mil
esto
nes
Page 4 of 22
© 2001 Jupiter MMXIJupiter
ISMs Exhibit Stunning Speed; 74 ISMs Exhibit Stunning Speed; 74 Percent to Go Live by Year’s EndPercent to Go Live by Year’s End
Expected Launch Q1
2001:14%
Answer Not Given:
12%
Launched:41%
Expected Launch Q4
2000:33% Source: Jupiter Research (10/00); n=63 (US only)
Page 5 of 22
© 2001 Jupiter MMXIJupiter
ISMs Seek Efficient Supply Chains, ISMs Seek Efficient Supply Chains, Not Lower Prices or Broader Reach Not Lower Prices or Broader Reach
• Online collaboration is a key goalOnline collaboration is a key goal
• Back-office integration requiredBack-office integration required
• Marketplaces provide single connection Marketplaces provide single connection to multiple trading partnersto multiple trading partners
• Chain-wide visibilityChain-wide visibility
• Anti-trust issuesAnti-trust issues
Page 6 of 22
© 2001 Jupiter MMXIJupiter
Supply-Chain Efficiency vs. Cost Supply-Chain Efficiency vs. Cost Savings as Value Propositions Savings as Value Propositions
70%
48%
42%
35%
23%
19%
19%
19%
29%
31%
43%
26%
5%
0%
0% 20% 40% 60% 80%
ISM Independent Net Market
Source: Jupiter ISM Executive Survey (10/00), n=30 (US only)
Va
lue
Pro
po
sit
ion
sV
alu
e P
rop
os
itio
ns
Supply-Chain EfficienciesSupply-Chain Efficiencies
Procurement EfficienciesProcurement Efficiencies
Expanded Customer andExpanded Customer andMarket ReachMarket Reach
Cost SavingsCost Savings
Save TimeSave Time
Community/RelationshipsCommunity/Relationships
Better PricingBetter Pricing
Percentage of RespondentsPercentage of Respondents
Page 7 of 22
© 2001 Jupiter MMXIJupiter
Incumbents Felt They Alone Could Incumbents Felt They Alone Could Drive Liquidity to Net Markets Drive Liquidity to Net Markets
35%
17%
8%
8%
8%
4%
16%
0% 20% 40%
Power In BAM Collectivity
Indeps Don't Meet Needs
Vision
Supplier Motivation
Supply-Chain Efficencies
Control
Tech Vendor Motivation
Inte
rnal
Dri
vers
Source: Jupiter ISM Executive Survey (10/00), n=30 (US only)
Percentage of RespondentsPercentage of Respondents
Page 8 of 22
© 2001 Jupiter MMXIJupiter
Ariba Fared Best in Signing Deals Ariba Fared Best in Signing Deals to Provide Technology to ISMsto Provide Technology to ISMs
Oracle:12%
SAPMarkets:13%
IBM:15%
C1Communications:
17%
i2Technologies:
19%
Ariba:24%
Source: Jupiter ISM Executive Survey (10/00), n=30 (US only)Page 9 of 22
© 2001 Jupiter MMXIJupiter
The State of TechnologyThe State of Technology
© 2001 Jupiter MMXIJupiter
Integration Cost a Major IssueIntegration Cost a Major Issue
Source: Jupiter Research (10/00); n=63, (US only)
Hardware13%
Software13%
Integration74%
Page 11 of 22
© 2001 Jupiter MMXIJupiter
Cost of Net Markets – Higher US Cost of Net Markets – Higher US Costs Reflect Greater Maturity …Costs Reflect Greater Maturity …
Source: Jupiter Research (10/00); n=63, (US only)
$1-$5 million46%
$5-$10 million
24%
$10-$30 million
28%
over $30 million
2%
Page 12 of 22
© 2001 Jupiter MMXIJupiter
… … in Europe, Custom Way More in Europe, Custom Way More Common Than Package SoftwareCommon Than Package Software
0% 20% 40% 60% 80%
Package
Custombuild
Page 13 of 22
© 2001 Jupiter MMXIJupiter
Functionality Needs Depend On Functionality Needs Depend On Buyer’s Relationship With SellerBuyer’s Relationship With Seller
Buying From Buying From Existing SuppliersExisting Suppliers
•
• Informational over Informational over transactionaltransactional
• Fewer deals per participantFewer deals per participant• Better for commodities than Better for commodities than
custom goods due to custom goods due to complexity of purchasecomplexity of purchase
• Catalogue technologyCatalogue technology• Search technologySearch technology
• Transactional over Transactional over informationalinformational
• Lots of deals per participantLots of deals per participant• Purchases often supplier -Purchases often supplier -
specific specific due to performance due to performance requirementsrequirements
• Data miningData mining• Product/order manipulationProduct/order manipulation
Bu
yer
Nee
dB
uye
r N
eed
Buying From Buying From New SuppliersNew Suppliers
Buyer Buyer MarketMarket
Source: Jupiter ResearchPage 14 of 22
© 2001 Jupiter MMXIJupiter
Faint Glimpses of Online Faint Glimpses of Online CollaborationCollaboration
• Developer Community - CatapulseDeveloper Community - Catapulse• Planning, Forecasting, Restocking - i2, AribaPlanning, Forecasting, Restocking - i2, Ariba• Cross-industry - NooshCross-industry - Noosh• Inter-department – MercataInter-department – Mercata
Vendors - Vendors - i2, OpenText, Catapulse, i2, OpenText, Catapulse, Manugistics, Manugistics, Adaxa, Exterprise, AgileAdaxa, Exterprise, Agile
Page 15 of 22
© 2001 Jupiter MMXIJupiter
Integrators / ASPs Serve Integrators / ASPs Serve Different AudiencesDifferent Audiences
• Evaluate specifically against requirementsEvaluate specifically against requirements
• Lean, mature vendor management teamLean, mature vendor management team
• Brick and mortars – avoid ASPs nowBrick and mortars – avoid ASPs now
• ASPs – focus on race for ERP, CRM, SMEsASPs – focus on race for ERP, CRM, SMEs
Page 16 of 22
© 2001 Jupiter MMXIJupiter
Early Days in EuropeEarly Days in Europe
© 2001 Jupiter MMXIJupiter
Many Clamour For AttentionMany Clamour For AttentionIndustryIndustry # net markets# net markets
AerospaceAerospace 77
AgricultureAgriculture 4444
ChemicalsChemicals 2424
Computer/TelecomComputer/Telecom 1313
ConstructionConstruction 2929
Consumer GoodsConsumer Goods 66
ElectronicsElectronics 33
Oil/GasOil/Gas 1313
Food Food 1010
Industrial SuppliesIndustrial Supplies 3636
Metals and MiningMetals and Mining 1616
Motor IndustryMotor Industry 44
Paper and OfficePaper and Office 1515
PharmaceuticalPharmaceutical 1818
Transportation/FreightTransportation/Freight 2828
UtilitiesUtilities 44
Page 18 of 22
© 2001 Jupiter MMXIJupiter
Net Markets Not Yet Ready for Net Markets Not Yet Ready for ActionAction
Not yet26%
Under 6 months
26%
Over 6 months
48%
Page 19 of 22
© 2001 Jupiter MMXIJupiter
Early Value Added Services Early Value Added Services Complete Transaction Process Complete Transaction Process
31%
31%
36%
46%
49%
59%
62%
82%
0% 20% 40% 60% 80% 100%
Inventory Management
Wireless
Document Management
Business Intelligence
Content, jobs etc
Catalogue Management
Logistics
Credit and Financial Services
Source: Jupiter Executive Survey (10/00); n=90, (US only)
Which of the Which of the following features following features and services do and services do
you plan to add in you plan to add in the next 12 the next 12 months?months?
Percentage of RespondentsPercentage of Respondents
Page 20 of 22
© 2001 Jupiter MMXIJupiter
18%
21%
23%
38%
62%
0% 20% 40% 60% 80% 100%
Competitive Issues
Low PC Penetration
Lack of Education
Trust of Marketplace
Lack of InternetPervasiveness
Internet Immaturity Remains Internet Immaturity Remains Main BarrierMain Barrier
What are the main barriers to getting a critical
mass of participants onto your Net Market?
Page 21 of 22
© 2001 Jupiter MMXIJupiter
Treat Small and Medium Treat Small and Medium Enterprises With White GlovesEnterprises With White Gloves
3%
31%
49%
79%
0% 20% 40% 60% 80% 100%
Other
Global 500
Global 2000
SOHO and SMEs
What size companies are you targeting?
Page 22 of 22
© 2001 Jupiter MMXIJupiter
The Biggest Market Exists for The Biggest Market Exists for Enabling Partners to Trade OnlineEnabling Partners to Trade Online
Buying From New Buying From New SuppliersSuppliers
Buying From Existing Buying From Existing SuppliersSuppliers
Ow
n
Ow
n
Tra
nsa
ctio
nT
ran
sact
ion
Fac
ilit
ate
Fac
ilit
ate
Tra
nsa
ctio
nT
ran
sact
ion
Buyer MarketBuyer Market
Ro
le f
or
New
On
lin
e E
nti
tyR
ole
fo
r N
ew O
nli
ne
En
tity
Big MarketBig Market$$$$$$
Huge MarketHuge Market$$$$$$$$$$
Medium-to-Small Medium-to-Small MarketMarket
$$
Does Not ExistDoes Not Exist
Source: Jupiter Research