I thought the following was an interesting read. <<
The B2B Analyst
MINNEAPOLIS--(BUSINESS WIRE)--July 28, 2000--
- U.S. Bancorp Piper Jaffray's Weekly B2B Newsletter, Volume 1, Number 22 - Jon M. Ekoniak, 650-233-2278, jekoniak@pjc.com
Timothy M. Klein, 612-303-5544, tklein@pjc.com
The B2B Analyst Is Published Each Friday And Delivered Free To Subscribers Via e-Mail.
Did you know that if you multiply the number 111,111,111 by 111,111,111 you get 12,345,678,987,654,321?
Did you also know that the B2B Analyst is the best weekly source for up-to-the-minute information on B2B e-commerce?
To subscribe, go to www.gotoanalysts.com/b2bsubscribe/
Looking for more insight on the B2B e-commerce market?
Look for Jon Ekoniak's article "Trends in the B-to-B Space" featured on pages 166 to 168 in the August edition of Upside Magazine.
Each Friday morning Jon and Tim conduct a live interview with RadioWallStreet. To listen live, go to radiowallstreet.com at 9:00 a.m. PST. Interview archives are also maintained on the RadioWallStreet Web site.
In This Week's B2B Analyst:
I. INDEX - U.S. Bancorp Piper Jaffray B2BEC Index
II. Market Insight
III. B2K - Management Matters: Do Different Times Demand Different
Jockeys?
IV. Weekly News
V. Filings & Pricings
VI. Appendix - Bios
I. INDEX - U.S. Bancorp Piper Jaffray B2BEC Index
Close: 121.40 Past week: -25.07 (-17.1%) Past month: +14.25 (+13.3%) Since inception (7/1/99): +21.40 (+21.4%)
The Index took on the market and came up on the short end, posting a 17.1% decrease. Twelve of the companies registered double-digit losses, led by Neoforma and Ventro (a), with 38% and 42% decreases, respectively.
II. MARKET INSIGHT - B2B Remembers The Enterprise And Focuses More On Collaboration Than Aggregation
During the recent rise, then fall, of public opinion around B2B e-commerce the focus of attention was on the new intermediaries. Few were not at least somewhat enamored of the gargantuan opportunities to use the Internet to aggregate buyers and sellers, creating the almighty butterfly. While most intermediaries are not faring so well against the recent test of time, we do believe that select models will survive and live to see a new IPO market. However, the bigger point is that with the market's recovery from the B2B hangover, we see that B2B is not dead, but that the focus is shifting away from how the Internet can help intermediaries aggregate to how it can help enterprises collaborate. Stated alternatively, we believe that the leading B2B companies are now more focused on solving problems for enterprises using the Internet than on aggregation for aggregation's sake. By focusing on the enterprise, B2B companies can deliver tangible value today, monetize that value, and possibly in the end use their position as solutions provider to become market maker.
The success of an enterprise-focused approach to B2B e-commerce can be seen in some of the leading public companies such as FreeMarkets (a), CommerceOne (a)(c), and Ariba, which all sell solutions mostly to enterprises, but are positioned to one day potentially operate as a more neutral intermediary. While the models vary differently, the key distinction is that the leaders in B2B are delivering a distinct and tangible value proposition to one enterprise at a time with the potential goal of building a broader marketplace, but regardless, creating real value today.
In addition to these more procurement-related B2B companies, we see a number of companies solving enterprise problems using the Web to manage collaboration across the supply and demand chains. Leading vendors are helping enterprises to realize internal cost savings while significantly improving relationships with supply-chain partners, suppliers, distributors, and customers. Companies such as MatrixOne (a)(b) and Agile Software have developed Java-based solutions that facilitate real-time interaction across the supply chain. To optimize the extended collaborative Web environment, MatrixOne has developed application integration solutions that link its collaboration backbone to legacy enterprise systems such as ERP, PDM (product data management), and MCAD, enabling a quick and effective means to gather and share data across disparate systems.
To further optimize processes outside the four walls, Web-enabled channel management solutions developed by ClickCommerce, Webridge, and Entigo, to name just a few, are helping large businesses to exchange critical product/service information, order status, and customer requirements with resellers, distributors, and customers--in real time. In the critical--and usually most difficult--last mile issue of fulfillment, companies such as Yantra and Capstan are significantly reducing the inherent complexity in logistics by using the Internet to facilitate necessary collaboration during the fulfillment/logistics processes.
With a growing arsenal of Java-based solutions spanning the supply and demand chain, we believe that this enterprise-focused wave of "e-business" will gain such momentum and adoption that the "e" will become redundant. The Internet, while revolutionizing the activities of our economy, is really enabling the accelerated evolution of business away from an internal asset-centric focus toward an external network of customers, partners, and suppliers. The ubiquitous "Net," with its inherently distributive quality, is making traditional methods of communication and collaboration--phone, fax, EDI, and even e-mail--obsolete, as Web-based applications become a cheaper, more effective, and quicker solution. As a result, we believe that not too long from now, we will no longer talk of the divide between old economy and new economy, there will only be THe-conomy as created by a wealth of solutions that separate leaders from followers, based on adoption of the Internet to do business better.
III. B2K - Management Matters: Do Different Times Demand Different Jockeys?
Ask any analyst or investor for his or her top criteria in evaluating a company, and the list will inevitably include the word management. All companies, regardless of sector, need top-notch management, or jockeys, to "win the race." However, different sectors demand different types of leadership. While traits such as domain expertise, strategic vision, and communication skills are necessary across the board, a sector such as B2B demands a particular type of individual.
As a new technology sector, B2B demands leaders that are, among other things, innovative and nimble, capable of managing rapid growth, and comfortable making decisions in uncertain market conditions, particularly during a company's early stages of existence. Given that these traits are not often found amongst the leaders of the world's largest corporations, there have been many opportunities for young executives to emerge as leaders of top B2B companies. The list of such young executives includes the likes of Daryl Magana of Bidcom, John Beasley of ChemConnect, Charlie Moore of CarStation.com, David Perry of Ventro, Scott Andrews of SciQuest.com (a), and countless others.
But during the past several months a whole new set of challenges has emerged for B2B companies, which require a long list of additional leadership traits from a management team. With funding more difficult to come by, discipline and cost control have become key. CoBAM formations and customer desires for complete solutions have made domain expertise more important than ever, with industry connections and the ability to relate to "old economy" leaders becoming critical. Moreover, as B2B companies become larger in terms of employees, divisions, offices, and finances, previous managerial experience within larger organizations has become more important.
With these new challenges many of the above-mentioned young leaders have brought on assistance from outside. For example, Daryl Magana became chairman of Bidcom, with Lucent (a) veteran Doug Sabella taking over the CEO spot. John Beasley has remained in his CEO role with ChemConnect, yet brought on chemical industry veteran Phil Ringo as COO. And Charlie Moore stepped into the position of president at CarStation.com, allowing former Ford (c) executive Ron Goldsberry to assume the roles of chairman and CEO.
But not all young leaders have sought such assistance. In fact, in our estimation this process of "implanting grey management hair" happens less frequently than not in B2B companies.
So what is the right path to take? In a perfect world, we believe that it would be great to have a management team with both sets of traits, those exhibited by the young and entrepreneurial, as well as those exhibited by the seasoned corporate executive. Unfortunately, there is a shortage of people with such a mix of experience.
Given a choice between these two paths, some would say that changing times demand a change in leadership, and that the traits necessary to launch and nurture a business in its early stages are different than those needed to take an organization "to the next level." There is also a school of thought, which believes that old-economy executives will never understand the technology world as well as the young, and that many young executives simply need a little more time to develop; the examples often held up are Bill Gates, Scott McNealy, and Michael Dell.
We are of the opinion that B2B companies operating within "old-line" industries such as steel and chemicals will benefit significantly from grey management hair, as relationships and domain expertise are essential. Yet this is less important within industries that are new and driven largely by technological change. In many cases a middle road of sorts may be best. There is no doubt that as an organization matures, there are compelling reasons to bring seasoned executives on board. Yet by maintaining the organization's young leaders as well, an organization can bolster its professional management capabilities, while still retaining its innovative, entrepreneurial growth culture of origin.
This is not an easy path to trek, but we believe that the decision of "who will play the role of company jockey" will be crucial in determining which companies win the race.
IV. WEEKLY NEWS
-- Amazon.com's (a) president and chief operating officer, Joseph
Galli, has resigned to become president and CEO of VerticalNet
(a). Galli succeeds Mark Walsh, who has been appointed
chairman at VerticalNet.
-- Covisint's co-CEO, A. Alan Turfe, has resigned to become CEO
at Metal Spectrum.
-- Commerce One Inc. formed an alliance with GE Global eXchange
Services, which will let customers not only buy, but also pay
for, their purchases online. GE Global eXchange Services is
the nation's leading electronic data interchange processor.
-- LeaseForum selected FreeMarkets' ASP-based AssetExchange
technology to power its RemarketXchange marketplace.
AssetExchange provides an online listing of loan portfolios
and financial assets traded among banks and other financial
institutions. LeaseForum is an online marketplace for
originating and managing leases.
-- Ames Department Stores selected Retek Inc. ((a)(c)) to help
manage its retailing and merchandising operations. Ames is the
nation's largest regional, full-line discount retailer.
V. FILINGS & PRICINGS
Filings
IPO
-- ViryaNet Ltd. (VRYA), provider of business-to-business
Internet solutions for service communities.
Subsequent
-- Commerce One (CMRC) filed a shelf registration.
Withdrawals IPO
-- Account 4 (AFOR), a provider of enterprise application
software for professional service companies.>>
Greg |
