Sunday, February 25, 2001

eMarketer Names Emerging Leaders Among B2B Exchanges

eMarketer has named the leading benchmark B2B exchanges among three separate categories - third-party, consortium-led and private exchanges, following the release of its comprehensive eCommerce: B2B Report. The new report estimates worldwide B2B e-commerce will grow to $2.7 trillion by 2004.

"These leading benchmark exchanges (see chart), within their respective categories, provide excellent examples of a diverse range of products, revenue models, and technologies," said Steve Butler, eMarketer senior business analyst.

eMarketer defines exchange ownership models as:

· Third Party -- generally run by an independent company, usually an internet start-up.
· Consortium-led -- formed by leading old-economy companies within a vertical industry.
· Private -- owned and operated by one large company that permits other companies to link to its services via a single exchange.

Among the leading exchanges, eMarketer notes commodity-based goods are traded via cattle-industry player eMerge Interactive and utilities industry leader Pantellos. While Altra Market Place derives a significant portion of its revenues from heavy transaction activity, Butler added that Citadon and SciQuest are examples of third party exchanges that are in the process of redefining themselves as technology providers and builders of private exchanges.

Another leader, Transora is one of the few consortium-led exchanges that already has begun to partner with other third party and consortium exchanges.

Butler also noted that the WorldWide Retail Exchange is unique because it is designed to serve as a non-profit entity. (It is a dot-org, not a dot-com) and Wal Mart has remained on the sidelines, preferring to build its own private exchange rather than join a consortium.

"Over time, eMarketer believes that most businesses will participate in multiple exchanges, with large companies participating in a hybrid model of private and public exchanges," added Butler. "While there is no guarantee that all of these benchmark exchanges will succeed, they do serve as important indicators of how online exchanges are adapting to the shifting environment of B2B e-commerce."

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