Even though several high profile B2B exchanges have closed their doors in the last few months, it's clear that B2B marketplaces, in some form, are here to stay. Most of the discussion regarding the role and future of eMarketplaces has focused on enterprises using them to streamline procurement. I'm as guilty as anyone else of ignoring SMEs (small and medium-sized enterprises or SMBs, as I've recently seen them called) and their role in the eMarketplace phenomenon.
Zona Research has recently published a very interesting report, B2B Marketplaces: The Next Big Thing or the Next Big Yawn? This report is must-read material for anyone building, thinking of building, or selling an exchange. It's also chock-full of valuable information for businesses thinking of getting involved in an exchange, including: the concerns of those already participating, what kind of ROI you might expect to see, the degree to which you might expect to see sales increase, and the kinds of fees you might be expected to pay.
Zona Research is probably best known for its comprehensive B2B exchange directory. It's been tracking eMarketplaces since the beginning of 1998. For those of you who have written to ask where you could find a complete listing of B2B exchanges -- and there are many of you -- try Zona Research.
Just before Zona's report came into my mailbox, I received an interesting alert from AMR Research entitled Integration is the Pain in the "But". This brief discussed the companies that offer extremely rapid integration between ERP (enterprise resource planning) software such as SAP, PeopleSoft, and Oracle, and major exchanges like CommerceOne and Ariba. Some of these integrators, such as webMethods and Actional, claim they can integrate an enterprise in as little as three weeks. The "but" that AMR Research identifies is that these quick integrations assume that very little or no customization has been done to the enterprise's ERP software to integrate it with the 50+ legacy software systems running in the enterprise. Of course, most ERP implementations are highly customized because they need to talk to all the other software in the house.
On the other hand, most small businesses don't use ERP software, so their implementation time with an exchange won't be hampered by complications of integration. Zona Research's report also suggests that small businesses, the most aggressive users of technology, are the most aggressive users of eMarketplaces to identify new customers. Consequently, in their own research, small businesses reported the largest increase in revenue as a result of eMarketplace participation.
The importance of eMarketplaces to small businesses and the importance of small businesses to eMarketplaces shouldn't be ignored. IDC, in its eBusiness Trends Newsletter article entitled eMarketplaces: Limits and Access estimates that the value of transactions that flow through true eMarketplaces (those linking many vendors to many purchasers) will be $1.4 trillion by 2004.
Small businesses should be early adopters in the eMarketplace arena because barriers to entry are less significant and the upside potential of reaching a larger audience is considerable.
Alexis D. Gutzman is an E-commerce Technology Author and Consultant and author of The HTML 4 Bible, FrontPage 2000 Answers!, and ColdFusion 4 for Dummies. Her newest book, The E-commerce Arsenal: 12 Technologies You Need to Prevail in the Digital Arena will be out in December. She can be reached at agutzman@internet.com
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