B2B - the basics
Sponsored by TheSpot4B2B
Industry Transformation
Article 2 covered the ways companies are utilizing B2B technologies to
improve their operations. It is true that major savings and efficiencies are
being garnered in the supply chain and purchasing areas
but B2B is also
causing change at an industry level, including the appearance of new companies
and whole new industries.
The entire B2C and C2C industry Amazon, AOL, CMGI, eBAY, Priceline,
Webvan, Yahoo etc has risen purely as a result of the internet and the B2B
technologies. You may be surprised to know that these companies have a combined
market capitalization of around $300 Billion. AOL, with all of 22 million
subscribers purchased Time Warner, who have many more than 22 million
subscribers to their magazines (never mind CNN and their other TV channels,
their music and book businesses, etc etc). Clearly B2C and C2C is a big deal.
It is fascinating to think through what allowed this all to happen. Was it
simply the ability to communicate (much more) rapidly, (much more) frequently
and (much more) accurately? Actually, yes! Ok, throw in easy to use browsers,
but thats pretty much it.
Looking at industry transformation in the B2B space, you find application
software companies (Ariba, Commerce One, i2), tools software companies (webMethods, BEA Systems, Extricity, Neon), market
makers (VerticalNet and
Freemarkets) and B2B
holding companies/incubators (such as ICGE). These companies currently have lower market
capitalizations than the B2C and the C2C companies, but it is early days yet. We
will take a closer look at some of these players in future articles, as we want
to spend some time looking at a phenomenon that is taking the B2B space by storm
that of online marketplaces.
Unless you have been completely out of touch recently you will have read
countless reports and press releases of online marketplaces springing up in a
variety of industries. From the auto industry to the airline industry to the
retail, computer and even the cement industry, online marketplaces have sprouted
all over the map. Many of these are built on Commerce One or Oracle platforms,
and use webMethods or other XML based tools. Some marketplaces are proprietary,
some are public and some are closed clubs
but they all exist to allow for
more efficient communication between the participants. Naturally they are being
used to buy and sell, but in future look to see more and more of them used for
other forms of co-operation or collaboration. Speaking of collaboration, B2B has
been an absolute boon to contract manufacturers. That too is a subject of a
future article, but Cisco has certainly led the way in High Tech contract
manufacturing by using the web and B2B technology.
When you boil it down, as we said at the start of article 1, B2B is nothing
fancy. The internet has provided the opportunity for everyone to communicate
with everyone else instantaneously, and companies the world over are using that
ability to build new businesses, and to drive costs out of their existing
businesses.
Looking down the road, perhaps B2B is not actually the big story here. What
really is the big story is that while ERP allowed for integration of processes
internal to a company, the internet (and B2B technologies) is allowing for
integration of processes between companies
and that is what is
transforming industries
Contributed by
theSpot4B2B
http://www.theSpot4SAP.com
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