E-marketplaces: analysts challenge IDC on the realities

Analysts have refuted claims made by market researcher IDC that the global e-marketplace industry shakeout wasabating, calling IDC's statements "frivolous" in light of the relative infancy of the industry here and abroad.

Labelling as "shallow" IDC's recent comments (Computerworld, July 23, p1) that e-marketplaces would turn the cornerfor the better, Aseem Prakash, an independent e-commerce consultant and head of Sydney-based Interactive KnowledgeOnline, said that while he thought traditional research firms "had their research to sell, businesspeople were boredwith all those types of frivolous predictions".

Prakash said there was no guarantee that e-marketplaces would succeed now or ever because organisations worldwide hadlittle idea of how to approach them, either from a business or technical standpoint.

"The market is not maturing, the dust had not settled yet. Any model can give you ROI but there's really no guarantee.

Companies will have to take a wait-and-see approach."

Prakash recommends that businesses should not hold their breath to see IDC's forecasted B2B e-commerce revenues fore-procurement and e-distribution of $US66 billion by 2005 come to fruition, claiming that "business models continuedto crumble".

"Companies clearly do not understand various e-marketplace models in business terms," he said. "They need to realisethat if they want to build an e-marketplace or a solution for it, it's a very long journey which will take them aminimum of three to five years."

"While people - whether they are analysts, vendors or the Internet market-makers - are projecting some greeneroutlooks, they are still to learn that success stories come from those who do not rush things, but realise that thereare some powerful alternatives to choose from, from the private exchange, straight e-hub or collaborative commerceexchange to the internal or external exchange," he explained.

Prakash believes that the only current e-marketplace success stories are General Electric and ANRON in the US, both ofwhich have been operational for a year.

According to Prakash, both operators took a slow-and-steady approach, taking the time to dissect their model forholes. "They did not look to get rich fast, but drove their venture purely from a business perspective, not atechnical one."

Foad Fadaghi, a B2B senior analyst with Jupiter Metrix Australia, called IDC's $US66 billion projection "a littleoptimistic", claiming there had not been much testing of e-marketplace business models in Australia.

"It's still very much in its infancy and most of the lessons learned are from US examples."

Furthermore, he claimed that more than half of Jupiter's Australian survey respondents (business procurement agents)"had not even heard of B2B exchanges, let alone use them".

Fadaghi added that IDC's forecast was eight times more than Jupiter's current estimates for 2001 alone.

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