Competitors Pull Together for E-business Success

AUCKLAND (03/03/2000) - You're more likely to work with your local competitors than fight against them in future, says Ross Mackie, marketing manager for Computer Associates International Inc.'s interBiz division.

Mackie has prepared a paper, along with Brent Sutton, interBiz supply chain group Pacific channel manager, to present at this month's ASP Summit in Sydney.

The paper, entitled "E-Communities: The New Business Ecology", argues that General Motors Corp., Ford Motor Co. and Daimler-Chrysler AG's recent decision to set up a common Internet automotive trade exchange is just the start of a new way of doing businessE-commerce will create clusters of businesses, banded together to share common services and gain economies of scale in their ordering. "Your competition is no longer just the shop down the road, but e-commerce sites that can take your business before you notice what's happening," says Mackie.

Mackie and Sutton define an e-community as a group of businesses with similar needs, such as an industry vertical, that collaborates to share business services like IT infrastructure, applications or supplier. Rentable applications from application service providers (ASPs) will give smaller businesses access to more sophisticated business applications.

A new role will develop from this, says Mackie: that of the Gatekeeper. By that he means the portal organizer or supplier who runs the e-community and keeps it together.

The role might be taken up by industry associations, he suggests, or by entrepreneurs who recognize the opportunity it presents. Members would pay to join and have access to all the services of the community. "Whoever does it, they will have tremendous power with the combined resources of the group," he says.

Strategic planning manager of Compaq's AlphaServer group Mick Keyes agrees that communities will develop, but gives another angle on them: not only will they give power to smaller companies but they will become the de facto marketplace - any organization which doesn't join will find it very hard to do business.

Service and brand advantages will also become less relevant -- when a buyer goes to one source, price is the differentiator.

"Take the steel industry as an example," he says. "The sale of steel is all being done through one portal with all the suppliers feeding in details of what they can offer. The key factor in a commodity market is price and now small suppliers in out-of-the way places have access to markets they'd never have reached before. And any steel supplier who is not in the group will go out of business."

There are opportunities in this for Compaq, he says.

The company may choose to host portals for industries and can help companies get involved. "A lot of those suppliers will be running older legacy systems, perhaps OpenVMS systems, and they need our help to use them in an e-business setting."

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