SAPPHIRE: Graf: e-marketplace brings new business model

Internet's newest business model is called "coopetition," and it is a mixture of cooperation and competition, Peter Graf, vice president, Internet technology, SAP AG said in his keynote here on yesterday.

The e-marketplace saves everyone money, Graf said. For both buyers and sellers, it can lead to up to a 70-percent reduction in transaction costs, and for sellers, it can lead to 50 percent lower sales costs by streamlining the process online.

These savings are what brought about the "coopetition" business model. Industries, ranging from the pharmaceutical industry to the airline industry, have recently opened up coopetition portals.

"In coopetition, competitors get together to create a marketplace," Graf said. "It helps them work together when purchasing, but lets them compete again when selling," Graf said.

Companies do this by creating co-ownership joint ventures. "They all share the profit, and they all share the risk," Graf said.

The new e-business model offers strong advantages over traditional business models, but the single most important advantage is the amount of collaboration between companies, according to Graf.

SAP's suite of Internet services brings collaboration to users by extending what was a "one-to-one" business model to an "n-to-x" business model, he said. Companies once did business with each other one at a time, using the telephone, fax or post, but now any number of businesses can be connected to any other by using the e-marketplace.

"The new world is different," Graf said. "Instead of providing a one-to-one connection to a business, you provide access to a portal."

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