BT plans to extend its Marketsite enterprise electronic procurement service to small businesses and consumers and is close to inking a deal with European distributor CSF to provide it to its resellers.
BT Marketsite was developed with Commerce One, which has designed similar networks for telcos in the US, Singapore and Japan. The US electronic trading specialist also expects to sign deals with six more carriers and other partners by the first quarter of 2000.
As a result, Anthony Peake, BT’s head of the UK service, said Marketsite would eventually be linked to Commerce One’s other international sites to form a global community for buying and selling socalled indirect goods such as furniture, stationery, travel services and computer equipment.
The trials with CSF are expected to start early next year, however, and will be the first of a number intended to enable smaller companies and consumers to buy from a global network of 6,000 vendors.
While Commerce One already had 5,000 suppliers signed up via partnerships with other telcos, the UK telecoms giant has added 1,000 of its own to the network since it was launched earlier this year (see VNU Newswire, 24 February, 1999).
Marketsite was initially aimed at large organisations that wanted to control and analyse their buying habits, but at $500,000 for a 200 seat licence for Commerce One’s Buy Site procurement package, this was prohibitive to small businesses. As a result, BT will now host a small business version of the application.
BT’s Peake said that high street retailer Boots had already signed up as a customer, but claimed that six others had also joined, although they wished to remain anonymous.
The company is also making the service available for use by internal staff and Peake said it expects to buy 95 per cent of its indirect goods this way by the middle of 2000.
When using the service, customers can either view a range of vendors' catalogues or continue contractual agreements with their existing suppliers if they so desire, but they are unable to see pricing until purchasing contracts are exchanged.
Peake said BT would subsidise the cost of putting vendors' catalogues onto the system, but intended to make money from subscription fees and transaction fees for all purchases made.
"Users can buy services from individual vendor's portals, but they won't get the analysis or the payment and logistics layers that BT Marketsite can offer," he claimed.
According to Forrester Research, the global market for total business to business commerce will hit $1.5 trillion by 2003, with the UK trading around $12 billion worth of goods and services by 2001.
As a result, the electronic procurement market has become very competitive, with traditional enterprise resource planning application suppliers such as SAP, which holds an equity stake in Commerce One, jumping in with their own portals.
Peoplesoft, which also holds a major stake in the procurement specialist, is a primary reseller of Buy Site.
While Chris Philips, Commerce One’s European marketing director, acknowledged that MySAP.com would eventually compete with Marketsite, he argued that the German giant would fall behind because its service has yet to be launched.
He added that SAP's stake in the company was too insignificant to cause potential conflicts.
According to the Aberdeen Group, electronic procurement will enable organisations to shave between five and 15 per cent off the cost of buying indirect goods, while cutting down the time spent on order processing from seven days to two.
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