>>I must be clueless.<<
You sure were about your B2B exchanges Bill. Commerce one hanging by the thread of its ass. Vert gone! Fmkt still looks like a loser, and neof? Who knows?
Btw
Nice day in Hollywood we're doing a Rod Stewart video shoot.
He's another guy who claims he doesn't know you.
>>Don't tell the 90 employees of Exostar that online business exchanges were a fantasy that died with the Internet gold rush.
The Herndon, Va.-based marketplace for the aerospace industry has hosted $1 billion worth of online auctions among about 11,000 buyers and sellers since it was launched two years ago by a handful of giant defense contractors. While not profitable, Exostar projects to be in the black next year.
Similarly, Cordium, Transora, Pantellos and Covisint — all fledgling Web exchanges created by consortiums of heavy hitters in the mining, package-goods, energy and auto industries — are chugging along, despite the death of hundreds, if not thousands, of other wannabe Internet business exchanges, most of them created by entrepreneurs.
"Adoption has probably been slower than we would have anticipated," concedes Donald Bielinski, chief executive of Exostar. "The human beast does not like to change fast unless they absolutely have to."
Like others struggling to create global business trading environments, Bielinski says the prolonged economic downturn is actually boosting Exostar's efforts, by pressuring companies to cut costs.
The whole idea behind B2B (slang for business-to-business) exchanges is to save companies money by allowing employees to do things online more cheaply than they can via telephones, fax machines or the old-style electronic links that connected only two companies at a time.
The grand vision — still years from reality — is of online markets connecting many companies to many others through interconnected Web clearinghouses that run, say, purchasing auctions, and allow instant sharing of documents.
Explosion of exchanges
Thousands of B2B exchanges appeared online between 1998 and 2001 as Internet-crazed executives raced to figure out how the Web might speed up or reduce tedious administrative work, starting with the manual typing of documents, mailing of invoices and processing of purchase orders.
B2B exchanges came in various flavors, including ones created by a single company, those launched jointly by groups of competitors and still others fashioned as independent start-ups.
Initially, Web markets were seen as little more than a drive to move corporate purchasing online. Think of an eBay in reverse, with a company holding auctions in which suppliers bid for the privilege of selling to it.
Suppliers, however, balked at participating in reverse auctions focused on price alone because it undermined the longtime relationships they had established with customers. As a result, several marketplaces quickly evolved to be more complex. Many are now attempting to automate functions besides purchasing, such as collaborative product design, forecasting demand for goods and monitoring inventory.
Meanwhile, the sector was hit by the same shakeout that has thinned the ranks of Web companies in general. Analysts say it's still too early to predict survivors or the eventual shape of the Internet's B2B trading environments, but the biggest wave of failure has been among exchanges designed to be neutral, public markets. More success is apparent among private and quasi-private markets created by groups of companies that provide instant customer bases for the fledgling markets they jointly own.
"It looks like B2B marketplaces have died, but they haven't," said Lauren Jones Shu, a research director at GartnerG2. "They have just gone private."
Exostar, for example, is jointly owned by Boeing, Lockheed Martin, Raytheon, BAE Systems and Rolls-Royce. Covisint was launched by the Big Three automakers, while Transora's investors include 50 giant packaged-goods makers.
Most are limited-liability partnerships that aspire to profitability but haven't reached it. Most also are still struggling to achieve enough independence from their creators to allow them to attract a wider group of participants.
The truly independent markets for the most part confronted huge cash-flow problems and enormous difficulty attracting customers in the face of competition from the industry consortiums. The latest high-profile failure came in July when VerticalNet, a builder of independent exchanges, announced the sale of its 59 industry marketplaces to a trade publisher for chump change — $2.3 million in cash.
Big comedown
What a comedown for a startup that sold stock to the public and reached a market valuation of $11 billion before plummeting to its current valuation of under $15 million.
While VerticalNet vowed to reinvent itself as a software provider, the new incarnation is no guarantee of success. Plenty of other leading B2B software makers have been reduced to penny stocks. Commerce One, which provides software to many B2B markets, has seen its shares drop to 36 cents. PurchasePro, which also offers software to run reverse auctions and online purchasing, is valued at all of $4 million.
Andrew White, another GartnerG2 analyst, says private exchanges allow big companies to share the technology costs of plugging their operations into the Internet. Rather than operate as true markets, some function as service providers for their owners, White suggests.
The next stage of their evolution, White thinks, will be developing software standards that will allow many Web markets to interconnect with one another.<<
seattletimes.nwsource.com |
