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B2B e-commerce sales to skyrocket
Wednesday, May 08 2002
by Matthew Clark

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Business-to-business e-commerce sales in Europe are set to grow dramatically in the next three years and one expert has urged Irish businesses to cash in.

According to the latest figures from research company Gartner, European B2B e-commerce sales will grow from USD500 billion in 2002 to USD2,300 billion by 2005. The predicted trends in Europe are also set to match global forecasts, with Gartner anticipating a growth in the market from USD1,930 billion in 2002 to USD8,530 billion in 2005.

In fact Gartner director Pascal Hureau said that take-up of so-called supplier enablement technologies and practices will evolve dramatically over the next 18 months. According to the Gartner analyst, in January 2002, 18.5 percent of all companies in Europe had adopted supplier enablement solutions and this figure is set to rise to 73.6 percent by the end of 2003. "B2B has already outperformed initial expectations and will continue to far surpass B2C e-commerce transactions," Hureau said in Dublin on Wednesday at the Microsoft Enterprise Seminar Series sponsored by Hewlett-Packard.

Hureau said Irish companies would be wise to jump in on this trend and claims that manufacturing, healthcare and financial services firms would be the first industries where B2B commerce practices will emerge. "You have to remember that we are basically starting from nothing, but by 2005 B2B e-commerce will account for around eight percent of European business-to-business transactions," he told ElectricNews.Net.

Moreover, Hureau said that large corporations will be at the forefront of B2B e-commerce uptake, because they will force their suppliers to bring their technology in line in order to cut costs. Small and medium sized businesses will follow, he said, but IT focused SMEs will be among the early adopters. The Gartner analyst also said that IT services firms will be some of the greatest beneficiaries of the B2B e-commerce roll-out, due to the fact that the software required to run such applications needs to be customised to fit individual companies.

Although Hureau's predictions for the market are generally accepted throughout the industry, many analysts say that there will still be some significant acquisitions and consolidation from B2B e-commerce software vendors in the coming months.

For example Nasdaq-quoted US company Divine, an enterprise integration and e-commerce solutions provider, has purchased no less than eight struggling competitors over the past few months, including Synchrony, Data Return, SoftMetric, NetUnlimited, Open Market, Northern Light, Delano and Nasdaq-quoted Viant.

And there is now talk in the industry that two major e-commerce marketplaces could merge: E2Open, formed by a consortium that includes IBM and Hitachi, and Hewlett Packard's Converge. Similar moves have been predicted for CPG Market and Transora as well as for Enporium and Pantellos. Meanwhile Microsoft, who famously purchased e-business software vendor Great Plains last year, is also thought to be on the acquisition prowl for e-commerce software companies.

But some of the most significant news among the vendors came on Tuesday when e-commerce software leader Commerce One announced the departure of both its chief operating officer and its president. These moves came three weeks after the firm announced an 81 percent drop in revenue and cut 530 jobs. But the most revealing aspect of the firm's difficulties is seen in its shares; the company's stock has fallen from a high of USD331 a share in early 2000 to around USD0.80 currently.

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