IDC predicts boom times ahead for online exchanges

Despite only a nominal take-up of e-marketplaces, IDC is predicting the exchange services market will register 30% annual growth.

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By  Greg Wilson Published  December 9, 2001

Despite only a nominal take-up of e-marketplaces, analyst house IDC is predicting the exchange services market will register 30% annual growth.

According to IDC’s numbers, the services surrounding exchange applications — either e-marketplaces or e-procurement apps — is expected to rocket from just US$ 0.8 billion in 2001, to US$ 2.8 billion by 2005.

“The concepts of e-procurement and e-marketplaces have evolved rapidly,” said Euan Davis, research manager for IDC’s European e-business services strategies program.

“European organisations are now shifting their focus from public marketplaces to private marketplaces, having discovered that making public e-marketplaces work is difficult, time-consuming and raises security and collaboration issues with their partners. As a result, the public e-marketplace industry is quickly consolidating — the number of players is dropping and no new entrants can be detected.”

E-marketplace sites are also integrating e-procurement functionality into their value proposition. Historically, online marketplaces have focused on lowering the price of procuring goods, through increase competition resulting in lower costs or reverse auctions.

“Nowadays, e-marketplaces operators are quickly adopting e-procuring to make procurement of goods more efficient,” added Dominique Raviart, senior research analyst for IDC’s European supply chain management program.

The changes in the market are also reflected in the shifting focus of the systems integrators and consultancy firms, which are now offering further ‘value-add’ services, alongside the usual set-up services.

“Organisations are now integrating their applications, not only within one enterprise but also among several enterprises and trading partners. By integrating applications, organisations can maximise the value of their e-procurement and e-marketplace investments. Furthermore, infrastructures are being built in anticipation of the next step in the supply chain field — collaborative commerce,” commented Raviart.

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