E-marketplace battle predicted for limited but lucrative contracts

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Despite the almost daily announcements about the creation of e-marketplaces, the market research firm IDC believes projections of thousands by 2004 are overzealous, forecasting only several hundred e-marketplaces.

“E-marketplaces are just one segment of the B2B e-commerce landscape,” said Leo Lipis, senior analyst for IDC’s e-marketplace services research program. “Many of those announced will not be built, many of those built will not survive, and many of those that survive will consolidate into super e-marketplaces.”

According to IDC, an e-marketplace is an Internet-based broker of goods or services within a community of sellers and buyers. It must have an open structure and a level playing field for all participants. Although it believes the number of actual e-marketplaces will be finite, IDC is confident plenty of opportunity will still exist for service providers.

“A limited number of e-marketplaces translates into a limited number of contracts on which to bid, but this does not mean the opportunity around these contracts is small,” Lipis said. In fact, IDC expects service contracts for e-marketplaces to be quite lucrative - the largest will top tens of millions of dollars, and the total market will exceed $10 billion in 2004.

“The key to cashing in on the e-marketplace service opportunity is acting quickly because there will be only a limited number of contracts with e-marketplaces.”

Additionally, IDC reminds service providers that e-marketplaces are just one of several opportunities triggered by the Internet. The integration of buyers and sellers into e-marketplaces, eprocurement, edistribution, intranets, and wireless integration with Web sites are a few examples of others.

IDC

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