One big, busy bazaar

By Dr. Somesh Nigam, CEO, Vinimaya Inc. -- Purchasing, 12/22/2000

Ten years from now, the B2B "marketspace" will be one giant, seamless online platform, rather than the current collection of individual marketplaces and suppliers. It will function in much the same manner that the Web seamlessly links various pieces of the Internet.

Today's explosive growth in B2B is only the beginning. By 2010, most of the 14 million U.S. businesses will be linked electronically via intelligent, Web-centric B2B networks enabling efficient information flows among buyers and sellers. These networks will allow buyers to search for any product and to retrieve, directly from sellers, pricing, availability and other information. Chances are, these dynamically linked businesses won't need the services of present-day B2B exchanges, although a few evolved counterparts of today's exchanges will play a small but significant role in spot sourcing, excess inventory auctions, etc.

Making this vision possible is the development and proliferation of standards for exchanging business information. Although XML is being touted as the next standard, differing implementations and divergent approaches are preventing B2B platforms from speaking easily with each other. Buyers and sellers still have a hard time finding each other and communicating. B2B may be growing exponentially, but it is in danger of becoming an economic Tower of Babel-a heavily populated community where residents exist as individual islands.

The situation is analogous to pre-Internet days 10 years ago. Information resided in discrete sections accessible mostly through non-compatible technologies. Private dial-up networks. Gopher. WAIS. Veronica. Usenet. Finding information was not easy, thus most of the Internet's potential went untapped.

The real explosion in Internet usage sprang from development of browsers and the HTML standard. With these innovations, all the disparate sources of information were linked and presented in uniform format, enabling easy search and navigation. The rest is history. Uniform standards for B2B data and transactions will result in a similar H-bomb-style explosion in B2B e-commerce growth. B2B e-business will no longer require expensive, customized solutions. Even the smallest businesses will have affordable, easy access to the B2B marketspace.

The effort by IBM, Ariba and Microsoft to develop uddi (Universal Description, Discovery and Integration) for interfaces and directories is promising. But standards evolve over time. Predicting what formats the market will embrace 10 years from now is an impossible task, no matter who is backing them (OS/2 and push technology come to mind).

It's more likely that interim or bridge solutions will sew together disparate B2B information. Intelligent agents, shopper bots and directories leveraging XML and other emerging standards will pull data from its fragmented and incompatible formats and organize them into unified databases as an interim standard for search, navigation and information exchange between buyers and sellers.

Real growth in B2B will come when buyers and sellers can easily find each other and conduct transactions using universal standards. Once that happens, the B2B world of 2010 will be of a size, scale and breadth that will be scarcely recognizable by even the most optimistic forecasts of today.

Vinimaya Inc. is an "infomediary" aggregating buying opportunities from multiple Net markets.