e-Commerce Goes Industrial

By Dr. Steve O'Neil, N'Fusion, Inc.

When we first looked at the concept of "commerce" on the Web, the thought of actually selling things was an anathema to many Webbies. After all, the Web was a repository of free information and a medium for the rapid exchange of ideas and opinions. Nevertheless, the commercial agenda marched forward, first into the world of books and music; then into beanie-babies, clothing and Viagra. Some years later, as the concept of e-commerce has been more or less embraced, we are beginning to see the arrival of e-commerce business models in the OEM and MRO marketplaces. According to a September 2000 research study by Jupiter Media Matrix, online business-to-business commerce will grow from 3% to 42% of total trade between the years 2000 and 2005. This equates to $6.345 billion in online spending by 2005!

The concept of the Industrial Marketplace has its roots in the exchange of information and the desire among entrepreneurial managers to shrink and streamline the transaction chain. This gave rise to the concept of "portals" which were originally conceived as gateways to horizontal -- then vertical -- markets and disciplines. In the future, we will doubtless see this concept embellished and refined to include wireless devices, PDAs and Web-enabled cell phones. We will also see the promise of lower software and administration costs reflected in the growth of ASPs, or Applications Service Providers. These are business models which allow manufacturers, distributors and even end-users to utilize sophisticated (and expensive) software and hardware solutions that are hosted by third party providers. Rather than purchase and maintain this horsepower in-house, users will pay a fee to the ASPs who will bear the infrastructure, software upgrades and staffing costs associated with running highly focused applications platforms.

As the promise of business-to-consumer business models plummet to earth like so many bad home-built aircraft, and legions of dot-coms burn through their mountains of cash like this summer's wildfires, the staid world of brick-and-mortar sees growing promise in setting up business-to-business adjuncts to their established channels to market. The implications for both designers and other OEM functions are profound. Already ASP modules are available on a fee basis through such vendors as AviationX, E-Chemicals, E-Steel and Buildpoint. The goal of these services is to lower transaction costs, provide a cache of information (including pricing structures) on competitive products and services, and lift the burden from OEMs of supporting in-house IT operations. Instead, designers will use collaborative design tools, undertake "product synchronization" via the Internet, and job out custom parts, rapid prototyping models and assemblies through bidding forums such as Supplybase, Inc. http://www.1rs.com/011df-590 and ManufacturingQuote.com http://www.1rs.com/011df-591.

This bidding forum allows designers to job out custom parts.

The front end of these tools and systems are the Marketplaces which are emerging for almost every type of product you can think of. Automotive parts suppliers will know Covisint http://www.1rs.com/011df-592 , chemical product OEMs will know the ELEMICA market http://www.1rs.com/011df-593 , and aluminum producers will know MetalSpectrum http://www.1rs.com/011df-594. As of September 2000, Forrester Research identifies 128 vertical market hubs alone covering industries from construction and petrochemicals to utilities, heavy industry and aerospace. Even R&D and the manufacturing process are being rolled into the picture by concerns such as The Integrated Manufacturing Technology Initiative (IMTI) at http://www.1rs.com/011df-595 . For an example of how the electronics industry envisions this affecting your lives, you can check out the e2opnen initiative of Lucent, Matsushita, Nortel, Seagate and others at http://www.1rs.com/011df-596 . All in all, there will probably be no industry, niche, OEM, or MRO function which will not be touched by this promise of new efficiencies and riches in the 21st century.

Advertising Age's BtoB provides marketing information and links to other portals.

For a good overview of how pervasive the marketplace concept is even today, take time out for a visit to eMarketplaces at http://www.1rs.com/011df-597 . Here you can find one of the most complete set of links to scores of marketplaces for the automotive industry, aviation, metals, plastics and electronics. Line56 at http://www.1rs.com/011df-598 is another marketplace portal which inventories, with hot links, marketplaces for ceramics, computers, MRO supplies and materials, metals and mining, transportation and industrial concerns. Finish your excursion with a trip to Advertising Age's BtoB at http://www.1rs.com/011df-599 . This site gives you access other directory portals, as well as additional information on e-commerce in general, benchmarks, and how they envision turning glitz into glory.

Steve O'Neil, Ph.D. is President of N'Fusion, Inc., an editorial and Internet consultancy which aids technology companies in integrating their print and online strategies, improving advertising and branding accountability, and building end-to-end e-commerce solutions. The company is headquartered in the Tampa Bay, FL area with offices and affiliates throughout the US, Europe, and the Pacific Rim. Steve can be reached at stephenjo@earthlink.net or 727-742-9169.