Big Boys are Ready to Pounce

 
 
By eweek  |  Posted 2001-05-28 Email Print this article Print
 
 
 
 
 
 
 

Industry stalwarts are starting to edge out struggling B2B upstarts.

No one is immune. Its simple evolution: survival of the fittest. Once a new market moves beyond a niche to a necessity, industry giants move in and take over.

Thats what is happening in B2B, an acronym that will soon go by the wayside as IBM, Microsoft, Oracle, SAP and Sun Microsystems start to subsume the technology and the market, usurping the handful of struggling vendors that launched the industry.

It started earlier this year when Ventro, an operator of independent vertical e-marketplaces, shut down Chemdex and Promedix, and VerticalNet sold off its NECX electronics parts exchange to competitor Converge.

Earlier this month, Metiom, a maker of e-procurement software, filed for bankruptcy. Now, PurchasePro, a developer of e-marketplace software, is on the skids.

Ariba and Commerce One are hardly in better shape. Commerce One is suffering supplier enablement problems that are frustrating its customers. During its first user-group conference call, customers complained of catalog loading snafus and high transaction costs.

"Youre scaring people away," said one user from a large, Midwest industrial parts manufacturer. "We had to turn away one supplier because they couldnt reach a contract with C One. Three to four vendors said they were concerned with transaction costs."

Ariba has seen its stock price tumble from $20 in February to $6.50 last week, making the company ripe for acquisition. But Ariba partner IBM, which has been cited as a possible buyer for the struggling e-procurement software company, may have bigger things up its sleeve. Rumors are that Commerce One partner SAP soon may announce a deal with IBM Global Services. IBM also has been selling off its interest in its other B2B partner, i2 Technologies, a supply-chain management software maker.

Meanwhile, IBM and other application server vendors continue to beef up their products to provide much of the functionality promised by e-marketplaces. Greg Conley, IBMs general manager of e-marketplaces, says IBM would add features to WebSphere that would make it an ideal platform for B2B applications, relegating Ariba and Commerce One to app vendor status.

IPlanet already has added functions like electronic bill presentment and payment to its app server platform. And Microsoft, which has forged minor B2B partnerships with Commerce One and others, is working to include trading partner services and functionality into its .Net strategy.

All this may make corporate customers happy, but its bad news for B2B companies, if history is any guide. "CIOs are saying there are way too many software products out there and too many software companies," says Tom Berquist, an analyst with Goldman Sachs. "They would like to see consolidation but, as you know, mergers between software companies dont always work."

 
 
 
 
 
 
 
 
 
 
 

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