E-Marketplaces Bring Opportunities for Startups

SINGAPORE (04/25/2000) - The dot-com companies -- small startups born on the Web -- should take advantage of electronic marketplaces to bring them on equal footing with the big established players.

Small companies that join e-marketplaces are looking to do two things, said Jocelyne Attal, vice president of marketing transformation/integration at the Software Group of IBM Corp. Among others, Attal is responsible for IBM's WebSphere software for e-marketplaces.

"Number one is to extend their customer base, and improve their customer service," she said. "Number two is to be able to save costs on office essentials like furniture. In fact, a lot of business-to-business (B-to-B) marketplaces today for the small business environment were created to cover very specific industries, like one for staples, that fill the needs of smaller companies to come together to buy basic services on the Web."

As for business opportunities, the e-marketplace is very important for small businesses too because it gives them access to a larger base of customers, Attal noted.

"Like the chemical e-marketplace, Chemdex, which is really creating new markets for them. Chemdex has made it possible for small distributors of chemical products to survive and be competitive. And it has made it possible that large chemical companies be represented in places where they were not."

Established large companies can also use e-marketplaces while leveraging on their existing assets.

"If you look at exchanges set up by the big companies like the one built together by Ford Motors and General Motors, if they use the Internet properly to build large communities, they can still continue to sell through their existing car dealers. So it's about a new type of business model, leveraging, in fact, on what they have already."

Attal feels that smaller companies should not be overly concerned that exchanges set up by the established players will end up as monopolies.

"I don't think this will happen for two reasons. One is because the Internet is a free market, so you have to be really competitive by providing the best quality of services. The second reason is that the antitrust law in the United States will apply on the Web as it applies today in the non-virtual world."

And Attal believes that other countries will pass similar laws as those of the United States.

Meanwhile, IBM recently announced WebSphere B2B Integrator, designed to help businesses quickly connect to and create e-marketplaces. It integrates these users' own computing systems, tying together operations like inventory management and shipping, and integrating with their trading partners' systems.

The product is built on WebSphere Web Application Server and the MQSeries messaging software. It also uses open IBM extensible markup language (XML) technology for the exchange of electronic-contracts, and enables a busines to interact with other firms within an e-marketplace irregardless of the type of computing systems deployed.

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