'Old' E-commerce Plus 'New' E-commerce to Drive Economic Value of Electronic Transactions to $3.8 Trillion by 2002.

Business/Technology Editors

CAMBRIDGE, Mass.--(BUSINESS WIRE)--Feb. 8, 2000

Shift From Private Leased-line Network Based EDI Transactions

to Internet-based Transactions Shows Adoption of the Internet

by Traditional Industries

The growing use of Internet-based electronic transactions in traditional industries is a key indicator of a fundamental shift to an &uot;e-conomy,&uot; according to Giga Information Group (NASDAQ:GIGX) analyst Ken Vollmer. While the &uot;old&uot; e-commerce activity of electronic data interchange (EDI) transactions has been a critical component of business for decades; the growing use of Internet-based EDI shows that companies in traditional industries are embracing &uot;new&uot; e-commerce over the Internet.

&uot;The exponential rise in business-to-business Internet e-commerce will fuel dramatic growth in EDI, as more large companies use new Internet-based tools to include their smaller trading partners into the process,&uot; said Vollmer. &uot;Even though EDI is a major component of business today, with an estimated transaction value of $3 trillion in 1999, Internet e-commerce will drive the economic value of EDI transactions to $3.8 trillion in 2002.

&uot;Also significant is the fact that less than 10 percent of EDI traffic was Internet-based in 1999, while we predict that by 2002, the figure will rise to 50 percent,&uot; continued Vollmer. &uot;Major corporations that have long seen the benefits of EDI are also beginning to see the value of the Internet on their business processes. Traditionally, only large corporations have been able to create EDI networks, due to the high costs of setting up and maintaining a private telecommunications network. With advances in reliability and security in Internet-based EDI, as well as the increasing availability of Internet-based managed network services, more large organizations, as well as smaller companies, will be able to build or participate in EDI networks. This will drive significant growth in the overall economic value of electronic processes.&uot;

Currently, approximately 250,000 companies have EDI networks in place. There are also another estimated two million smaller firms that could benefit from EDI systems but cannot due to the high start-up costs. The retail industry, for example, is one of the heaviest users of EDI for ordering, invoicing, scheduling and forecasting, yet only the major players have been able to afford private &uot;value added networks.&uot; In the future, many organizations will implement Internet and Web-based options to enable these smaller firms to exchange EDI documents.

&uot;Internet EDI will enable traditional corporations, ones that wouldn't dream of selling products over the Internet, to grow into organizations that depend upon a digital infrastructure for mission critical business processes; in other words, while they won't sell over the Internet, they still will become e-Businesses,&uot; said Vollmer. &uot;While many newer companies have fully embraced the Internet, the increasing adoption of Internet EDI by these traditional companies is a true indicator of a key shift in the economy.&uot;

About Giga Information Group

Giga Information Group (NASDAQ:GIGX) provides objective research, advice and continuous coaching on technology for e-Business. Giga's integrated suite of offerings helps clients make strategic decisions about the technologies, people and processes needed to excel in the new digital economy. Emphasizing close interaction between analysts and clients, Giga delivers support with the speed and scope necessary for e-Business.

Giga began providing services in April 1996 and now has a global client base encompassing more than 1,000 organizations and over 118,000 licensed users, making it the fastest growing company in the IT advisory industry's history. Its enterprise clients include companies that use, sell and invest in technology.

Headquartered in Cambridge, Massachusetts, Giga has 10 other offices covering the Americas and Europe. Giga is also represented by distributors in other areas of the world. The Company's Web site can be accessed at http://www.gigaweb.com. The Company's logo with the name Giga Information Group is a registered trademark of Giga Information Group, Inc.