Wednesday, November 29, 2000

eMarketplace Services to Generate $15 Billion

Worldwide demand for emarketplace services will balloon from $2.5 billion in 1999 to more than $15 billion in 2004. Along with the market's strong growth will come a significant shift in its customer base. Currently, the emarketplace services vendor's biggest customer is the emarketplace itself. Soon, however, emarketplace participants will be the primary clients. This information comes from a new IDC report titled Worldwide eMarketplace Services Market Forecast and Analysis, 1999-2004, the first ever market forecast and analysis for emarketplace services.

"The greatest opportunity for emarketplace services firms will be in integrating participants' internal systems with those of the emarketplace," said Dr. Leo Lipis, senior analyst for IDC's eMarketplace Services research program. "Integration with an emarketplace will tighten integration between suppliers and purchasers and help participants streamline processes and reduce costs."

Nowhere will the changing type of customer be more apparent than in North America. In 1999, nearly all the region's emarketplace service revenues were generated from the actual emarketplaces. By 2004, their share will be less than 50%.

Because of the changing customer base, IDC believes it will be essential for services firms to provide implementation and integration services. "While there is certainly room in the market for specialized consultants and application hosting and management firms, the firms that are able to provide implementation and integration services will have the greatest ability to acquire and maintain market share," Lipis said.

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Plenty of Demand for Broadband
Harris Interactive today released the results of a new survey of more than 69,000 Internet users that measured the perceptions of both current broadband users and those planning (planners) to move to broadband DSL and cable modem Internet connections.

The study estimated that approximately 38.9 million U.S. households connect to the Internet, and about 3.6 million U.S. households connect using a high-speed connection (cable modem, DSL, ISDN or satellite data service). Most of the high-speed users use either cable modem (2.35M) or DSL (0.85M).

The study’s results show that there is high interest in high speed Internet connections among current Internet users. About one-in-eight of the households who connect to the Internet said that they planned to start using either DSL or cable modem service within the following six months. The planners were about evenly split between DSL (2.4M) and cable modem (2.6M) services as their connection of choice.

According to the Harris Interactive Consumer TechPollSM results, both DSL and cable modem users are happy with their connections. About 85% are satisfied with the reliability of their broadband connection, and about 90% are satisfied with the speed of downloading pages and files.

But the study also shows that all is not completely rosy with these services:

David Tremblay, Director of Technology Research, Harris Interactive, said, "These results show that while subscribers are happy with their broadband connections once they get them, there is room for improvement in the provisioning of these services to shorten the wait time between order placement and functioning broadband connections."

At the time of the survey, a projected 5 million Internet-using households planned to get either DSL or cable modem broadband services within the next six months—one-third more than were already using them. These intended subscribers saw little difference between DSL and cable modem services:

Tremblay added, "What’s holding back revenues for broadband service providers isn’t a lack of demand for broadband services. The business is there to be had if service providers can get their provisioning acts together. What is interesting is how little difference broadband planners see between the two dominant service types, DSL and cable modems. So, while the challenge now is provisioning, as service areas become more widespread, service providers will have to better differentiate their offerings unless they want to battle it out simply on price."

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News Tidbits (appears every day on front page)
- Unions are now invading the eWorld. Two sites, Amazon.com and eTown.com, are facing possible unionization of employees. It only takes 30% employee approval for a union to form.

- Even though ICANN's selection of new domain name extensions is over, those who lost are planning to fight back. Look for possible lawsuits and other actions from companies who gave up $50,000 but weren't selected.

- Holiday traffic is already beginning to take its toll on select Websites. One of the worst hit was PayPal.com, which had several outages on Sunday and Monday

-Network Solutions and DotTV have struck a deal in which Networks Solutions will begin offering the .tv extension alongside .com, .net, and .org. DotTV paid the nation of Tuvalu $50 million for the rights to control its .tv extension.