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E-Marketplace Participants

E-marketplace participants are motivated by the opportunity to reduce costs and increase efficiency in the supply and distribution chains for their products and services. As a result, some e-marketplace participants will want tighter integration with business practices and IT systems than a manual interface through a Web browser can offer. These e-marketplace participants are just beginning to use e-marketplace service firms to help them link to an e-marketplace. ASPs are targeting these companies as potential customers as well, with the benefit being more efficient supply-chain interactions and more rapid transaction velocities.

Many of the implementations between ASPs and e-marketplace participation are rapid, completed in as little as eight weeks for basic middleware connectivity, but more typically engagements will be with large and medium-sized corporations with complex existing IT infrastructures.

Legacy data, integration with previous processes, and overcoming resistance to change all factor into the timeline companies require in migrating applications to e-marketplaces. Clearly the role of system integrators (KPMG, Anderson Consulting, Deloitte & Touche, among others) serve to assist in the implementation steps required in the larger organizations. The role of the ASP is one of integrating customer needs into the common set of functionality delivered in applications.

Business Service Providers

Although value-added business service providers such as financial services, business intelligence, or logistics firms have remained relegated to the background of the e-marketplace service landscape, they'll gradually take on a more important role during the next few years as e-marketplaces seek to differentiate themselves from one another. E-marketplace service providers and ASPs will be called upon to provide consulting and application implementation services for e-marketplaces and their business service partners.

How Current Roles Are Shaping Up

That ASPs have come forward with applications for e-marketplaces is not surprising given the shakeout that's occurring in the mid-level of the ASP market. Further, International Data Corporation estimates that as much as 60% of the effort necessary to build an e-marketplace is spent on customized application development and integration—activities that are not characteristic of ASPs. To adhere to their nature, ASPs are primarily providing hosting and application-management services to e-marketplaces.

ASPs have quickly recognized the opportunity available in serving participants with applications that connect the participants to e-marketplaces. Two types of solutions have been announced in this area of the market:

  • Those that provide middleware or enterprise-application interface (EAI) functionality, translating multiple electronic data interchange (EDI)–based and extensible markup language (XML)–based systems into the particular flavor used by a particular e-marketplace

  • Those that provide business application functionality such as purchasing, accounting, billing, and inventory management

Although most announcements in this area of the market have been from independent ASPs, some e-marketplaces, such as GXS' Express Marketplace, are offering this ASP service to their customers and consider it to be an integral part of their revenue models.

As e-marketplaces mature, expect the network of e-marketplaces and participants to become varied and vertical-market focused. E-marketplaces will begin to integrate with one another to offer a wider variety of products and services as well as access larger markets. Participants will want to connect themselves directly to multiple e-marketplaces. E-commerce ASPs will have the opportunity to provide this enhanced connectivity on a hosted basis, saving participants the cost, effort, and risk of investing in connections to multiple e-marketplaces. The role of application providers will then consist of supporting an ASP model in addition to the application needs of public and private trading exchanges. It's clear from the direction of the market today that private trading exchanges provide the greatest opportunity for agility and market responsiveness for companies. ASPs will have to develop their products to reflect this market dynamic.

Due to the immature nature of business service offerings today, such as channel analytics and intensive data mining in the e-marketplace arena, a significant opportunity to offer business service partners similar connectivity or application services can be expected to show significant development and partnership activity in the coming year.

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