The great e-marketplace shakeout has begun. As venture capital dries up in the B2B space, and as brick-and-mortar companies launch competing initiatives, cash liquidity becomes vital to survival. E-marketplaces will consolidate quickly as many become unable to live on transaction fees alone, according to researchers at Gartner Group. The marketplace value proposition must extend beyond re-intermediation to include new ways for participating enterprises to source and deploy IT resources. Operating costs are skyrocketing as new B2B technologies emerge and are integrated with legacy systems. The evolution of the technology is expensive and is not timely. Full maturity of the functionality and the appropriate technology is not expected until 2003. By 2005, global 2000 companies will see less than 15 per cent of all procurement performed through marketplaces.
Gartner recently announced that e-marketplaces will facilitate 37 per cent of total business-to-business (B2B) e-commerce transactions until 2005. However, few e-marketplace business models will survive and Gartner recommends that marketplaces focus their efforts to seize the opportunity to dominate their segments while they still have a chance.
The issue of which companies will survive the e-marketplace shakeout largely depends on capital and on business models. By 2005, three dominant marketplace business models will control 95 per cent of the market: business services marketplaces, commodities marketplaces, and integration services marketplaces. Marketplaces that try to be all of those will fail, but marketplaces that focus and execute well will dominate their segments.
Business services marketplaces will deliver buyer-supplier value by providing focused support for business process and support for trading partner relationships. Examples include financing options for goods or services purchased, as well as fulfillment and delivery services offered by logistics marketplaces. Over time, services provided by business services marketplaces will enable enterprises to outsource some buying activities, reduce the cost of buying and reduce the cost of sales.
Bluetooth chips snap up market share
While the first mobile phones and notebook PCs featuring Bluetooth wireless networking technology are due later this year, the wireless technology will not really sink its teeth into the market until next year, according to a new market research report. By 2005, more than one billion Bluetooth-equipped devices will have been shipped, and total shipments of Bluetooth chips are predicted to hit 1.4 billion units, creating a market opportunity value at $US5 billion, according to the report, from Cahners In-Stat Group.
First-generation devices based on the wireless radio technology will allow voice and data connections within a 10- metre radius. Initially, Bluetooth will surface in devices such as mobile phones, notebook PCs, PC cards and adapters, according to the report. By next year, however, PC vendors are also expected to feature the technology in desktop PCs. But while the technology is enjoying broad industry support, several industry observers have recently voiced concern over the high level of expectation surrounding this emerging technology.
IT staff shortages to impact productivity A recent report on IT staffing dynamics and challenges published by IDC Australia, suggests most enterprises in Australia are sounding an alarm about information technology (IT) labour shortages. Research findings, based on a survey of 400 Australian organisations, revealed that the largest majority of enterprises (82 per cent) acknowledge a significant level of IT staff shortage which is having a direct impact on productivity. Businesses indicating a strong sentiment of IT skill shortage explicitly show that delays to application implementation are occurring as a result (75 per cent). By industry, delays to new application deployment vary considerably between different sectors. Industries indicating the most significant hindrance to implementation schedules are the Banking/Finance and Services sectors, where 87 per cent of organisations in both cases, experience some level of disruption.
In addition, staff turnover occurring within IT/IS departments is higher than company wide attrition rates and the rate of new IT recruitment planned for the next 12 months appear conservative in view of the strong expression of IT staff shortage shown earlier. Survey results show that IT/IS departments will increase by only six per cent, including recruitment for the replacement of existing positions as well as for newly created jobs.
Factors that inhibit organisations maintaining their desired pool of IT labour resources are, in order of importance:
The rate at which businesses are changingThe level of IT skills available in the marketplace andThe rate at which technology is constantly evolving.
Businesses most affected by these factors are the ones operating in a large-scale environment. Linux platform adopters appear the least affected.
Mobile Web use to outstrip PC use
The number of people using their mobile phone to access the Internet will exceed 500 million worldwide by 2005, outstripping those using personal computers to go online, according to Andersen Consulting. Improved voice recognition technology, more secure payment systems and better wireless services will all help fuel the demand for online operations from mobile phones. "We are seeing a massive explosion in the number of people online using PCs and a huge increase in the use of mobile phones," a spokesman said. "What this does is bring them together and combine those huge rises".
Ireland, one of the world's top software producers with a government keen to promote hi-tech investment is seeing heavy growth in technology use. The number of people using personal computers to access the Internet in Ireland was expected to rise more than threefold to over 1.5 million by 2004 from around half a million at present. But mobile Internet users would not be far behind, hitting more than one million by 2004 from only a token amount currently.
Print survives the Internet
In the face of custom news and information and online communities, the old-fashioned print magazine is viewed by many in Silicon Alley as archaic and historical memorabilia. But according to Fairfield's Media Consumption Study, that perception is far from accurate. Magazine readership increased 24 per cent from 1995 through 1998 with the average adult American spending 28 minutes and 12 seconds reading consumer magazines in a normal day. While this growth is not meteoric, it runs contrary to contemporary Internet thought. Additionally, magazines did not suffer from a loss of consumer volumetrics as have both TV and Newspapers.
Web Commerce Doubles in 2000
The online business population expanded by a third to 550,000 substantial online businesses by mid-2000, and each was growing revenue at an average rate of 130 per cent over the previous year, according to research undertaken by ActivMedia Research. As barriers to Web entry disintegrate and the means to access rises, the Web is increasingly accessible to the mainstream, developed world population. As a result, Online commerce activity for year 2000 will swell to $US132 billion worldwide, double the $US58 billion reported in 1999, as reported in the just-released ActivMedia Research study.
E-Readiness' gap threatens growth
An analysis of 42 countries' current ability to participate fully in the digital economy paints a grim picture for most of them, according to a report published by US researcher McConnell International. The authors of the report found that the situation is so bad that, unless key countries act quickly, world economic expansion could stagnate. The report examined the 42 countries for what the authors call "e-readiness". Each country was rated according to five categories: the availability and access to networks; government and industry leadership in fostering electronic business and electronic government; the strength of laws protecting intellectual property rights; the availability of workers to support electronic business; and the electronic business climate.
The results show the "e-readiness" situation in the 42 countries, including Argentina, China, Italy, Spain and South Africa, is more serious than the year 2000 (Y2K) problem turned out to be. Countries chosen for the study are those where information technology industry leaders are looking to expand, and whose success is the most critical to achieving he next phase of global economic growth. The 42 counties comprise nearly three-quarters of the world's population and produce one-quarter of global goods and services.
Overall, 46 per cent of the ratings how substantial improvement is needed to support electronic business and electronic government. Only eight of the countries - Costa Rica, Malaysia, South Korea, Taiwan, Estonia, Hungry, Italy and Portugal - received the highest rating in at least one of the five categories.
Manufacturing application revenues on a runDemand for applications that specifically support manufacturing and retail/wholesale distribution will remain healthy for the foreseeable future, according to IDC, which expects worldwide revenues in this market to increase at a compound annual growth rate (CAGR) of almost 11 per cent from $US13.6 billion in 1999 to $US22.5 billion in 2004. Business processes, such as engineering collaboration, retail customer personalisation and work-order optimisation, will be automated in the product supply chain for the first time, contributing to growth in this market. Additionally, long-automated product supply-chain-specific business processes such as materials requirement planning will be updated, further driving the market.
IDC divides the overall market into three segments: product engineering, manufacturing-specific, and retail/wholesale-specific applications.
The segment for product engineering applications is currently the largest part of this application market and accounted for $US6.3 billion of the market's revenues in 1999. However, this segment of the market will grow more slowly than any other segment through 2004.
The market for retail/wholesale applications will be the fastest-growing segment. Revenues here will earn a CAGR of 13.3 per cent from 1999 to 2004.