|
Monday
- July 3, 2000
U.S. Internet B2B Trade will
Soar to $6 Trillion
The Internet's impact on the US Business-to-Business
(B-to-B) market will be expansive with more than $6 trillion
in online trade expected by 2005, representing 42 percent
of total US B-to-B non-service spending, according to new
research from Jupiter Communications, Inc. (Nasdaq: JPTR),
the worldwide authority on Internet commerce. To take advantage
of this overwhelming growth, Jupiter advises that businesses
begin now to incorporate Internet strategies throughout their
procurement and sales processes, and invest in multiple selling
models to leverage market disruptions while protecting share
of market.
Jupiter's research reveals that
while this year's Internet B-to-B trade will only represent
three percent of the total US B-to-B non-service market
or $336 billion, the online volume will grow twenty fold
over the next five years opening the doors for new business
models such as net markets and coalition markets. Currently,
the direct channel, a model of one seller to many buyers,
dominates 92 percent of the Internet B-to-B market. However
in 2005, 35 percent of the Internet B-to-B trade volume
will be conducted via a net market, a model of many buyers
and many sellers, or through a coalition market, comprised
of a consortium of buyers or sellers. Net markets can completely
disrupt current channels and alter how companies and industries
conduct business. While many factors can power net market
penetration in a given industry, the degree of fragmentation
and price volatility remain as two critical drivers.
"The value proposition
of the Internet is on a grander scale for the B-to-B space;
the sheer size of B-to-B trade, coupled with inefficient
processes, makes the Internet migration of business strategies
very attractive. Early adopters have already made their
investments, but it will be the mainstream companies that
now embrace the Internet and will drive it to mass penetration," explains
Melissa Shore, senior analyst for Jupiter Communications. "Over
the next several years, businesses will face an array of
new opportunities to improve and expand their sales and
procurement processes. They must invest now even though
the payoff will take some time; it will require several
years to see a substantial migration from today's manual,
paper-based solutions to tomorrow's Internet purchasing
counter."
Given the current spotlight
and impending chaos, Jupiter advises companies to resist
hesitation and start building their online B-to-B infrastructure
now. Shore advises that businesses also must look to diversify
their investments across multiple models and partners.
All companies are not in the same position; businesses
must allocate their resources according to the company's
market power within their specific industry. While a company's
market share is a component of their market power, other
factors, such as the degree of accepted industry standards
and occurrence of proprietary channels, will also have
an impact. Companies with stronger market power should
allocate more of their investment toward the direct selling
model, while those lacking power should seek opportunities
to differentiate themselves within net or coalition markets.
Unlike online business-to-consumer
transactions, defined by a completed transaction, Jupiter
defines online B-to-B trade as any sale made by a business
to a business where either the terms of the transaction
are agreed upon online, or the majority of terms or item
features are configured online.
Jupiter has utilized data on
sales made available by the US Department of Commerce for
its base year B-to-B calculations. Jupiter does not include
certain services—except in the case where services are
directly applicable to the provision of goods in question,
(e.g., transportation, which is largely a service) —and
retail trade in calculating the dollar values of the various
supply chains.
Police May Monitor Email
in the UK
According to the BBC News:
"Several key changes are
being made to the UK Government's controversial plans to
allow the police sweeping powers to monitor e-mails.
The Home Office has said that
under the changes the home secretary must sign a warrant
before an individual's e-mails can be monitored.
Other amendments include informing
company directors if their staff are asked to hand over
the passwords or encryption keys used to protect e-mail..."
Click
here for the full story.
--
Return
to July 2000 News Archive
|
