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e-commerce software growth opportunities
by: AugustWest79 (36/M/Denver Colorado) 9359 of 10142
As far as e-commerce growth in general, this independent research report on e-commerce software adoption is a MUST read.
forrester.com 98cmr.htm
Demand for software that lets firms do business over the Net is taking shape. On-line commerce is taking off, enticing firms of all sizes to use the Internet as a low-cost, high-impact channel. These initiatives will spawn a hot market in commerce software and fundamentally change how companies buy, sell, and service. Forrester's prediction: Commerce software license revenue will skyrocket from $121 million in 1997 to $3.8 billion in the United States by 2002
$3.8B in e-commerce software projects by 2002!!!!! In the US alone. Of that Forrester predicts 37% will be sell side software which is OMKT's primary (but not only) area of expertise.
"The largest slice of license revenue -- 37% -- will come from sell-side systems. This software segment, consisting primarily of catalog and auction products from vendors like Open Market and iCat, will generate $1.4 billion in 2002 because:"
But OMKT also competes in the "tools" segment (with stuff like "SecureServer", "Folio", and now the various modular components of Transact), the "Services" area with implementation strategies, the "Buy Side" or B-to-B sector, and security side (Transact is a secure enterprise wide transaction processor, not just a simple storefront product).
Forrester predicts that large corporations will account for the majority of e-commerce software spending. "LARGE CORPORATIONS LEAD THE WAY By 2002, Forrester forecasts that 82% of all companies in the United States with greater than 1,000 employees will be doing business on-line. These firms will spend $2.9 billion on commerce software, accounting for 77% of the total U.S. market" One look at OMKT's customer base will tell you that these types of firms are heavily into OMKT's enterprise level Transact which tie in the e-commerce side into the back end ERP systems such as the Oracle, SAP, Baan stuff.
"Medium companies will energize indirect sell-side channels. The big companies dominate, but other factors also shape the market. For example, midsized firms will represent 39% of the buying entities in the market by 2002. While these units generate only 16% of overall market revenue, they account for 26% of all sell-side product revenue, pulling products and services through indirect channels like industry value-added resellers (VARs) and regional systems integrators." Check out OMKT's extensive list of partners and VARs that can exploit this indirect sales channel. openmarket.com
"Most small firms will avoid buying software. The vast majority of small companies lack the technical skills to buy commerce software: Only 2.4% of small companies in the United States will go this route by 2002. Beyond the software-capable -- some of them future Amazon.coms -- the balance of small firms will sign on for monthly fees with iCat Online, Viaweb, or ISPs like AT&T that are running multimerchant hosting software from vendors like Open Market." There ya go! The much touted CSP business model which both IBM and NSCP are trying to emulate as per announcments made at the Internet trade show in NY back in Sept.
So, if OMKT can capture just 10% of the $3.8B predicted by 2002, they would grow from a revenue of $60M to $380M even neglecting all European, Asia, Austraila, South America etc. That would be growth of 533% in 4 years or nearly 60% on an annual basis. NEGLECTING NON-US AND ASSUMING A SIGNIFICANT DROP IN MARKET SHARE. Throw those back in and you have phenominal growth opportunities.
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Posted: Nov 28 1998 9:46AM EST as a reply to: Msg 9358 by AugustWest79
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