MARKET RESEARCH.

Business-to-Business E-Commerce Transactions Becoming More Global

Worldwide business-to-business (B2B) electronic commerce was dominated by the North America region in 1999, but by 2004 the market will become a much more global marketplace, according to Gartner Group Inc. In 1999, worldwide B2B e-commerce reached $145 billion, and the North America region accounted for 63 percent of the market with revenue reaching $91 billion. In 2004, worldwide B2B e-commerce is projected to surpass $7.29 trillion; the North America region will account for 39 percent of the market with revenue of more than $2.84 trillion.

"Brick and mortar B2B commerce is increasingly international by nature, and the e-enablement of business will perpetuate this trend," says Leah Knight, principal analyst for GartnerGroup's e- Business Services worldwide. "The largest e-commerce players today are all US-based companies, but most generate a significant percentage of revenue internationally."

The strongest regional growth in the B2B market can be found in Europe. B2B revenue in Europe in 1999 totaled $31.8 billion. In 2004, the European B2B market will be more than $2.34 trillion.

"Already we're seeing some of the largest of the European companies such as BMW, Philips, KLM, Swissair, British Telecom and Deutsche Telekom aggressively adopting B2B e-commerce," says Petra Gartzen, principal analyst for GartnerGroup's e-Business Services Europe. "Now that this has the approval of the big companies, there's no stopping the tidal wave. This is one area where Europe has to catch up with the United States market rapidly, and all the signs would indicate that this will happen within the next four years."

Because of the recession the Asia/Pacific region experienced recently, this region has been slower to adapting B2B marketplaces, although the region is moving to this business practice rapidly. In 1999, Asia/Pacific B2B revenue totaled $9.2 billion, and by 2004 the region will have B2B e-commerce revenue of $992 billion.

"This process will see the development of powerful new e-markets and e-market makers that will fundamentally change the way organizations in the region conduct business locally and with the rest of the global economy," says Lane Leskela, principal analyst for GartnerGroup's e-Business Services Asia/Pacific. "In 2000, e-market makers in Asia/Pacific will be targeted for direct investment from commercial banks and venture capital funds expanding their e-business portfolios from the narrow focus on dot-com start-ups seen in the region to date."

Japan was the No. 3 region for B2B e-commerce in 1999, with revenue of $11.1 billion, but the region is forecast to be surpassed by the Asia/Pacific region by 2002. The B2B e-commerce market in Japan will reach $861 billion in 2004.

As the Internet penetrates into the Latin America region, this area will accelerate the implementation of B2B e-commerce. In 1999, the Latin America B2B market reached $1 billion, and in 2004 the market will total $124 billion.

"Primarily, some large firms are already benefiting from their early B2B setups in Latin America. In the next two years, we expect full deployment of B2B e-commerce by the remaining large firms," says Luis Anavitarte, director of Latin America research for GartnerGroup's Dataquest. "In addition, medium- and small- size enterprises are understanding the value of B2B e-commerce, and they are starting to create B2B platforms as well."

Windows 2000: It's Finally Here, But Are You Ready?

When Windows 95 was launched in August 1995, people lined up at midnight to be among the first to install the new operating system on their desktops. On February 17, 2000, Microsoft launches Windows 2000 in client and server editions. Like Windows 95, Windows 2000 represents a significant change in the Windows family of operating system, but unlike Windows 95, Windows 2000 enhancements are targeted at business environments, and the frenzy will be different this time around, according to analysts at Gartner Group Inc.

"Our clients are cautious about upgrading to new releases," says Michael Gartenberg, vice president in GartnerGroup's personal and distributed technologies area. "While we believe Windows 2000 Professional will prove relatively stable prior to Service Pack 1, compatibility testing, problem resolution and staff training will take at least several months for most enterprises. Windows 2000 may be ready for the enterprise, but many enterprises aren't yet ready for Windows 2000."

Major corporations, governments and small businesses face varying risks and benefits with Windows 2000 and migration timing. The keys to success are in fully analyzing return on investment, building an overall rollout plan, and following best practices in the migration process. In most cases, the most cost-effective strategy for developing Windows 2000 will be a phased migration that deploys new or replacement systems with Windows 2000, as opposed to upgrading installed systems.

According to GartnerGroup research, Windows 2000 server deployments should follow a conservative plan. GartnerGroup recommends that server deployments prior to Service Pack 1 should be limited to work-alike production pilots. Enterprises planning to use Active Directory or IntelliMirror will have design efforts that last three to 12 months (depending on directory size and architecture), but those design efforts can begin now.

Prediction For Windows 2000

By year-end 2000, between 15 percent and 20 percent of the 1999 commercial installed base of 32-bit Windows (desktops and laptops) will be upgraded or refreshed with Windows 2000 Professional, and between 40 percent and 45 percent by year-end 2001.

By year-end 2000, between three percent and six percent of the 1999 commercial installed base of Windows NT Server will be upgraded or refreshed with Windows 2000, and between 45 percent and 50 percent by year-end 2001.

Through 2001, 50 percent of midsize and large enterprise will encounter new compatibility problems with line-of-business applications, non-Windows interoperability or network infrastructure when testing Windows 2000 operating systems; that number will drop to 25 percent through 2003.

Through 2002, 80 percent of all Windows 2000 Professional migrations by enterprises with more than 500 desktops will exceed their budgets for time or money by at least 25 percent, primarily due to the lack of proper planning.