B2B Spending to reach $US8500 billion by 2005

Business-to-business electronic commerce transactions will reach $US8500 billion worldwide by 2005, according to Gartner Group. And while that represents an impressive growth rate of 81 per cent for five years running, e-commerce will be adopted more gradually than previously expected. That's because of the recent economic slowdown, the stock market correction, computer integration issues and resistance to automated business practices. It is unlikely that business will reach a critical mass, after which companies adopt e-commerce on a mass scale, Gartner analysts said.

Reality has set in and it is now recognised that the transition to Internet commerce will be a long and difficult period. Reaching the inflection point is probably not realistic in any time frame.

One of the main things slowing e-commerce is the economic downturn, which the WEFA economic forecasting group predicts will cause a 16 per cent reduction in the value of e-commerce transactions by 2005. Gartner thinks the effect will be slightly milder, because companies will try to save money through cost-cutting and seeking efficiency, rather than cutting back on purchases.

Gartner believes some organisations will be more judicious about IT investments: some will rely on legacy systems and delay replacing those systems in the current economic climate, and the adoption of Internet technology will be slower than anticipated.

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