How come? Let's review the story so far. E-marketplaces were super-hot for a short period in 2000. But by early 2001 Dell, e-commerce exemplar had already closed its market after four months, the start of a long crash that by late 2002 had shuttered the electronic doors of such hopefuls as e-cement.com, Mondus, and worldoffruit.com.
What went wrong? Well, some folks were plain greedy. Customers weren't that enthused when e-marketplaces wanted up to $30m for the privilege of connecting, and wanted a 4 percent cut on all their transaction.
A bigger factor: the big transaction numbers never happened. IDC estimates that even though business bought $200bn worth of goods and services off each other in 2002, just 20 percent of all B2B e-commerce went through e-marketplaces, with the rest happening via ordinary corporate Web sites. And the vast majority of that 20 percent goes through the two biggest e-marketplaces, the auto industry's Covisint and the aerospace industry's Exostar -- though others that seem to be bubbling along just fine.
Covisint and Exostar
Covisint claims since it went live in 2001 it has processed over $150bn worth of goods, and has 25,000 companies registered. Exostar says $2bn worth of goods have passed through its SourcePass system in roughly the same time. Similar signs of e-marketplace health include a forum called the Open Network for Commerce Exchange, which last year said its 18 e-marketplace members had all increased their transaction rates, and expected to continue to do so.
And then there are even new ones still coming on-stream -- such as Aquadia, a water-industry site set up in September 2002 by Thames Water and Suez. And vendors like Sterling Commerce and GXS (Global eXchange Services) do reasonable business continuing to set up and operate hubs and marketplaces. Ariba, Commerce One's rival, claims over 450 international companies are customers, linked by their software to a further 20,000 suppliers.
