Visions and Trends of Tomorrow’s B2B

© 2001 Jupiter MMXIJupiter

Visions and Trends of Visions and Trends of Tomorrow’s B2BTomorrow’s B2B

James MacAonghusAnalyst, Jupiter MMXI


AgendaAgenda

• Sell Cost Savings and You’ve Missed the PointSell Cost Savings and You’ve Missed the Point

• Replace Custom Build With Packaged SoftwareReplace Custom Build With Packaged Software

• Where Now For Net MarketsWhere Now For Net Markets


Sell Cost Savings and You’ve Sell Cost Savings and You’ve Missed the PointMissed the Point


Integration Requirements Will Integration Requirements Will Drive Infrastructure Investment …Drive Infrastructure Investment …

$2.6 $8.2$17.1

$43.6

$85.3

$137.3

$0

$20

$40

$60

$80

$100

$120

$140

$160

2000 2001 2002 2003 2004 2005

Infr

astr

uct

ure

In

vest

men

t

Source: Jupiter Net Market Infrastructure Forecast (11/00)

(in billions)(in billions)

Page 3 of 18


… … But Still Early Stages of But Still Early Stages of Marketplace DevelopmentMarketplace Development

Source: Jupiter Research

AdolescenceAdolescenceInfancyInfancyAmbitiousAmbitious

ClimberClimberTeensTeens Young AdultYoung Adult MaturityMaturity

Basic Basic Exchange Exchange FunctionsFunctions

Expanded Expanded ContentContent

Advanced Advanced SearchSearch

CollaborationCollaboration

Systems Systems IntegrationIntegration

GlobalizationGlobalization

LocalizationLocalization

Multi-MarketMulti-Market

MechanismsMechanisms

Transactional/Transactional/BehavioralBehavioralAnalysesAnalyses

Adjacent Market Adjacent Market CollaborationCollaboration

Highly IntegratedHighly IntegratedFeaturesFeatures

Net Market progress to dateNet Market progress to date

Remaining phases to maturityRemaining phases to maturity

Page 4 of 18


Sell to Early Adopters – Rest Sell to Early Adopters – Rest Will FollowWill Follow

Early Adopters

Late Followers

Early Followers

Laggards

Effectiveness Cost

Page 5 of 18


Selling Cost Savings Is Self-Selling Cost Savings Is Self-LimitingLimiting

Efficiency

Effectiveness

Page 6 of 18


Value Propositions for Value Propositions for Competitive AdvantageCompetitive Advantage

• Cycle timeCycle time• Brand substantiationBrand substantiation• QualityQuality• CapacityCapacity• Capital utilizationCapital utilization• Customer satisfactionCustomer satisfaction• ProductivityProductivity• RegulationRegulation

Page 7 of 18


Risks, Cost, ROI Make Competitive Risks, Cost, ROI Make Competitive Advantage More AttractiveAdvantage More Attractive


++

--

-- ++

Co

mp

etit

ive

Ad

van

tag

eC

om

pet

itiv

e A

dva

nta

ge

Cost SavingsCost Savings

Current Phase of B-to-B Current Phase of B-to-B Value MotivatorsValue Motivators

2003 Phase of B-to-B 2003 Phase of B-to-B Value MotivatorsValue Motivators

Page 8 of 18


Cisco’s B-to-B Investment Cisco’s B-to-B Investment RoadmapRoadmap


• 80% of orders 80% of orders done onlinedone online

• Customer Customer satisfaction satisfaction now 4.25, up now 4.25, up from 3.4from 3.4

• Substantially Substantially fewer errorsfewer errors

• Cycle time Cycle time down from 6-down from 6-8 weeks to 1-3 8 weeks to 1-3 weeksweeks

• Lowered Lowered inventoryinventory

• 55% of Unit 55% of Unit Volume Volume Shipped Shipped Without Cisco Without Cisco TouchTouch

• 25 Days to 10 25 Days to 10 Days’ Days’ Reduction in Reduction in Engineering Engineering ChangesChanges

• New Product New Product Introductions Introductions Accelerated Accelerated by 25%by 25%

Customer Customer FacingFacing

Connecting to Connecting to the Supply the Supply

ChainChain

New Product New Product LaunchLaunch

Page 9 of 18


Replace Custom-Build with Replace Custom-Build with Packaged SoftwarePackaged Software


Custom Build v Packaged, Over Custom Build v Packaged, Over TimeTime


++

--

-- ++

Fu

nct

ion

alit

yF

un

ctio

nal

ity

TimeTime

Packaged ApplicationsPackaged Applications

Custom BuildCustom Build

Page 11 of 18


Most Important Value-Added Services Most Important Value-Added Services Depend upon the Market Being PursuedDepend upon the Market Being Pursued

MediationMediation

Chat andChat andCustomer Customer ServicesServices

Buying From New Suppliers Buying From New Suppliers Buying From Existing SuppliersBuying From Existing Suppliers

RatingsRatings

CommunityCommunityInspectionInspection

GuaranteesGuarantees

InsuranceInsurance

ContentContent Supply ChainSupply ChainIntegrationIntegrationSecuritySecurity

NegotiationNegotiation

ShippingShipping

CreditCredit

CollaborationCollaboration

Product Product ExplanationExplanation

TrackingTrackingTrainingTraining

CriticalCriticalValuableValuableLess ValuableLess Valuable

Buyer Buyer MarketMarket

Value Value Added Added ServicesServices

EscrowEscrow

Source: Jupiter ResearchPage 12 of 18


Technologies Map to Market Technologies Map to Market MechanismsMechanisms


VendorVendor ExchangeExchange AuctionAuction Catalog Catalog AggregatorAggregator

Reverse Reverse AuctionAuction

AribaAriba XX XX XX XX

BizBotsBizBots XX

CommerceOneCommerceOne XX XX XX XX

IdaptaIdapta XX XX

MoaiMoai XX XX

OpenSiteOpenSite XX XX

RightWorksRightWorks XX

TradeMatrixTradeMatrix XX XX

VerticalNetVerticalNet XX

Page 13 of 18


Reasons to Use Packaged Reasons to Use Packaged ApplicationsApplications

• Despite team growth, competitive advantageDespite team growth, competitive advantage• Time-to-market for new functionalityTime-to-market for new functionality• Net market makers should focus elsewhereNet market makers should focus elsewhere• Post-merger integrationPost-merger integration• Scale and expansionScale and expansion

Page 14 of 18


Where Now For Net Markets?Where Now For Net Markets?


ISMs First to Define Future ISMs First to Define Future Value PropositionsValue Propositions

• Reduce cycle times – table stakesReduce cycle times – table stakes• Increased capacity and utilizationIncreased capacity and utilization• Industry-wide demand/supply viewsIndustry-wide demand/supply views• New financial instrumentsNew financial instruments• The Network EffectThe Network Effect

Page 16 of 18


Industry Sponsored Marketplaces Industry Sponsored Marketplaces and Independentsand Independents

• Technology acquisition - GHXTechnology acquisition - GHX• Creation of turnkey solution - GoFishCreation of turnkey solution - GoFish• Acquisition of liquidity services – e2openAcquisition of liquidity services – e2open• Supply chain efficiency - MetalSiteSupply chain efficiency - MetalSite

Page 17 of 18


Where Do We Go from Here? Where Do We Go from Here?

• Massive consolidation – liquidity, Massive consolidation – liquidity, partnerships will determine survivalpartnerships will determine survival

• Value-added services move focus Value-added services move focus beyond matchmaking to completing beyond matchmaking to completing entire life cycle of transactionentire life cycle of transaction

• Don’t ignore local and SME marketsDon’t ignore local and SME markets

• Private trading networks emergePrivate trading networks emerge

Page 18 of 18


Thank youThank you

[email protected]@jup.com


Custom Build Way More Common Custom Build Way More Common Than Package SoftwareThan Package Software

0% 20% 40% 60% 80%

Package

Custombuild

Fig 5: What technology solution(s) did you use to create your Net Market?


No15%

Yes85%

Transactions Within Standalone Transactions Within Standalone Marketplaces Will Shift to Inter- and Marketplaces Will Shift to Inter- and Intra-Marketplace TransactionsIntra-Marketplace Transactions

No76%

Yes24%

Are you linked or do you plan to Are you linked or do you plan to link to other net markets?link to other net markets?

Percentage of Markets Percentage of Markets Linked TodayLinked Today

Percentage of Markets Percentage of Markets Linked in FutureLinked in Future

Source: Jupiter Executive Survey (10/00); n=90, (US only)

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Visions and Trends of Tomorrow’s B2B