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Gartner Says Three e-Marketplace Models Will Control the B2B Market by 2005.

Business Editors

BOSTON--(BUSINESS WIRE)--Nov. 6, 2000

Analysts Examine the Future of Online Marketplaces

and Exchanges During Gartner's B2B eMarketplaces Conference

Business-to-business (B2B) e-marketplace functionality and participation are currently limited, but by 2005, more than 500,000 companies will be participating in e-marketplaces as buyers and/or sellers, according to Gartner Group, Inc. (NYSE:IT)(NYSE:ITB). These findings were presented today during Gartner's B2B eMarketplaces conference, which is taking place through November 8th in Boston, Massachusetts.

The developers and managers of B2B marketplaces, called e-market makers, have begun to attract large numbers of buyers and have begun to use the buyers' market power to attract sellers. The long-term effects of these new entrants in markets are yet unproven, but it is expected that benefits from their presence will far outweigh the costs.

"Independent e-market makers will help sellers increase the size of their markets by investing heavily in branding, as well as helping buyers meet their needs by attracting large numbers of sellers," said Barbara Reilly, vice-president and research director for Gartner. "Most importantly, independent e-market makers will manage massive quantities of supply and demand data and help foster the distribution of near-perfect information to buyers and sellers."

e-marketplaces are generally limited to spot buys, excess product sales and indirect procurement. As marketplaces mature, they will begin to mediate larger sets of buyer supplier relationships. Marketplaces will be forced to constrain their focus, producing an environment populated by three unique varieties of marketplaces:

The commodity marketplace - This marketplace will support high-volume trade of products and services of commodity or near-commodity status, as well as financial instruments such as futures contracts.

Business service marketplaces - These marketplaces will be focused on supporting specific inter-enterprise processes, such as those related to logistics, financial services, and maintenance, repair and operations (MRO) procurement.

Integration service marketplaces - This market will emerge with a focus on linkages and process definitions between trading partners to facilitate process-to-process integration.

"Individual marketplaces will find it increasingly difficult to support broad sets of commerce capabilities required to sustain relationships of differing intensity and duration," Ms. Reilly said. "Marketplaces will have to align themselves strategically with business services partners as well as technology partners."

Marketplaces will find themselves taking on the role of the traditional distributor as well as an application service provider (ASP). With business process efficiency comes added value and traditional customer responsibility. Marketplaces must take on the customer relationship management (CRM) initiatives that traditional brick-and-mortar organizations struggle with today through other channels outside of their internet initiatives.

Additional research and analysis on the B2B market is available to subscribers of Gartner's e-Business Services. These programs are part of wide range of Gartner services examining the e-business industry. These programs are designed to help senior executives, strategic planners and investors capitalize on emerging opportunities by providing research and analysis on electronic commerce and Internet marketplaces. Additional information on these programs is available on Gartner's Web site at www.gartner.com/public/static/home/ggebiz.html. To purchase a specific document or subscribe to these services, please call 800/419-DATA or 408/468-8009.

About Gartner

Gartner provides unrivaled thought leadership for more than 10,000 organizations, helping clients to achieve their business objectives through the intelligent and efficient use of technology. Additionally, Gartner helps technology companies identify and maximize technology market opportunities. Gartner's technology content and strong brand reach IT professionals globally through Gartner Research, its research and advisory unit; Gartner Services, its custom consulting unit; Gartner Events, including Gartner's renowned Symposia; and, at www.gartner.com. Gartner subsidiary TechRepublic, Inc. (www.techrepublic.com) is the leading online destination developed exclusively for IT professionals by IT professionals. Gartner, founded in 1979 and headquartered in Stamford, Connecticut, achieved fiscal 2000 revenue of $859 million. Gartner's 4,300 associates, including 1,400 research analysts and consultants, are in more than 80 locations worldwide. For more information about Gartner's industry-leading products and services, please visit us on the Web at www.gartner.com.
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Date:Nov 6, 2000
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