© 2001 jupiter mmxi jupiter the global b2b arena james macaonghus analyst, jupiter mmxi

© 2001 Jupiter MMXIJupiter

The Global B2B ArenaThe Global B2B Arena

James MacAonghusAnalyst, Jupiter MMXI


AgendaAgenda

• The Heavyweights: Industry Sponsored MarketsThe Heavyweights: Industry Sponsored Markets

• The State of TechnologyThe State of Technology

• Early Days in EuropeEarly Days in Europe


The Heavyweights: Industry The Heavyweights: Industry Sponsored MarketplacesSponsored Marketplaces


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


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


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


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


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


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)


Page 8 of 22


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


The State of TechnologyThe State of Technology


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


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


… … 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


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


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


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


Early Days in EuropeEarly Days in Europe


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


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


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?


Page 20 of 22


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


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


Thank youThank you

[email protected]@jup.com


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

© 2001 jupiter mmxi jupiter the global b2b arena james macaonghus analyst, jupiter mmxi

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