Gartner sees survival for only three Net market models

By Staff -- Purchasing, 10/19/2000

The Stamford, Conn.-based Gartner Group thinks Net markets will facilitate 37% of total B2B e-commerce transactions through 2004. But by 2005, Gartner believes only three dominant Net-market business models will control 95% of the market. These are:

• Business services marketplaces: Delivering buyer-supplier value by providing focused support for business processes and support for trading partner relationships. Examples include financing options as well as fulfillment and delivery services. "Over time, business services marketplaces will enable enterprises to outsource some buying activities, reduce the cost of buying, and reduce the cost of sales."

• Commodities marketplaces: Replacing some of today's inefficient markets that protect profit margins through asymmetric information, inefficient spot markets and excess product auctions. "For suppliers participating in commodity marketplaces, marketing will radically evolve, and price hedging and capacity management and sales will become core success factors."

• Integration services marketplaces: Focusing on both linkages between trade entities and process definitions rather than on business functionality as the "splintering of marketplace functionality seeds market demand for simplified interoperation approaches." As Gartner sees it: "This powerful new player will introduce a convergence of the marketplace, application software and ASP business models."

Tight focus will be a major key to success for Net markets, according to Gartner. "Marketplaces that try to be all will fail, but marketplaces that focus and execute well will dominate their segments." Gartner will examine the future of Net markets at the Gartner B2B eMarketplaces conference on November 6-8 in Boston.