Ecommerce Update

Less, But Still Plenty -- Few people can ignore the current economic downturn, and that applies to forecasts for the growth of B2B (Business-to-Business Ecommerce) previously made by industry analysis firms, which have recently been revised downwards by 16% from previous forecasts. For example, based on new data from Wharton Econometric Forecasting Associates, Gartner Group, in a March 13 statement (http://www3.gartner.com/5_about/press_room/pr20010313a.html), expects that,"With the downturn in the economy, the migration away from proprietary EDI to Internet technologies will be slower than earlier anticipated."

Slower than previously expected, perhaps, but still growing significantly -- on the global scene, Gartner Group predicts that there will be $8.5 trillion of B2B in 2005, growing from a "mere" $0.43 trillion in 2000. B2B will reach an expected $0.9 trillion this year, and then grow to $1.9 trillion in 2002. By 2003, Gartner expects global B2B to reach $3.6 trillion, rising to $6 trillion in 2004.

(Of course, different analysis firms have varying expectations (perhaps driven by differing definitions). For example, IDC expects worldwide Ecommerce (both B2B and Business-to-Consumer, or B2C) to reach $3.1 trillion by 2004 -http://www.emarketer.com/estatnews/estats/ecommerce_b2b/2001032 3_wo rld_biz.html?ref=wn . On the consumer front, Forrester Research has found that, "...total spending on online sales increased from $3 billion in January, to $3.4 billion in February." (http://www.nrf.com/content/default.asp?folder=press&file=Feb01 %20o nline.htm)

eMarketer offers a comparative table of several of these differing forecasts, where global 2004 B2B (not including B2C) estimates range from $1.4 trillion to $7.3 trillion -http://www.emarketer.com/ereports/ecommerce_b2b/welcome.html .)

Gartner's e-Business research director Lauren Shu sums up their position: "With the proliferation of e-marketplaces that had poorly thought-out business plans and inappropriate revenue models, it should not have been surprising that the cards came tumbling down this soon. A return to the sanity of fundamental, sound business principles, and the resetting of realistic expectations means that going forward, the market can expand in a more rational way, with e-marketplace business plans and participation decisions both more highly scrutinized, and thus more viable and more strategic."

Which sounds like a reasonable long-term prescription for success.

This is an excerpt from the "Rapidly Changing Face of Computing, " a free weekly multimedia technology journal written by Jeffrey R. Harrow, Principal Member of Technical Staff for the Corporate Strategy group at Compaq. A more extensive version of this discussion, as well as others around the innovations and trends of contemporary computing and the technologies that drive them, are available at http://www.compaq.com/rcfoc . Jeff's opinions do not necessarily reflect the opinions of Compaq. The RCFoC is a service of, and Copyright 2000, Compaq Computer Corp."