Analyst defines B2B leaders of the future

Only a handful of companies including SAP and Oracle will lead the burgeoning business to business (B2B) ecommerce market over the next two years.

Marty Gruhn, vice president of internet business solutions at research firm Summit Strategies, claimed that the companies, which also include internet startups Bid.com and Andele, will play a pivotal role in the emerging web based exchanges and virtual workplaces that are destined to shape the ebusiness marketplace.

During her keynote speech at the Internet Everywhere conference in San Francisco this week, Gruhn explained that exchanges and virtual workplaces would become popular because they enable participants to cut substantial costs out of the procurement process.

They also enable developers of such sites to generate revenue from both advertisements and rental and transaction fees, she attested.

"We are moving from consumer portals to vertical portals and virtual workplaces that support business processes of enterprises. Suppliers will look less at ads but to fees, commerce and transactions as revenue sources," she added.

One such creator of virtual workplaces is Bid.com, Gruhn said, which targets prime contractors in the construction industry. The aim is to enable chief architects and engineers to receive bids from subcontractors and to enable field workers to view plans and diagrams using wireless technology.

"Bid.com aligns around business processes that can be managed digitally. Pricing is per seat, per month, per user," Gruhn explained.

But web based exchanges are also beginning to appear, the latest one being an alliance between auto giants Ford, General Motors and DaimlerChrysler, to build a massive online procurement network with Oracle and CommerceOne.

And Gruhn believes players such as SAP and Oracle are updating their products to position themselves as ebusiness providers. "Digital exchanges cut the cost out of the supply chain. Ariba, Oracle, CommerceOne and SAP are all players here," she said.

She also singled out Andele because it enables small businesses to trade on multiple auction sites by aggregating their activities. "It allows companies to take part in ecommerce without having to know the technology," she said.

According to estimates by investment firm Robertson Stephens, the global B2B ecommerce market will be worth $3tn in 2003.