Privacy is key to e-marketplace success


Privacy is key to e-marketplace success

Analysts are predicting that private e-marketplaces will prove more successful than public ones because companies prefer to work with suppliers that they know.

Arlene Martin

The claims are being made following the breakup of a marketing alliance between business-to-business software companies Ariba and i2 Technologies. According to Matt Hanrahan, an analyst with Bloor Research, the establishment of private exchanges is becoming easier as the cost of entry to e-marketplaces is falling. Companies that want to take part in e-marketplaces can now get all the software they need from one supplier whereas before they had to work with several.

It was the ambition of Ariba and i2 to individually provide all the software a company needs that led to the breakup of their partnership. Ariba has bought software company Agile, a rival of i2, in order to provide a comprehensive offering to its customers while i2 has bought software company Rightworks, a rival to Ariba, for the same reason.

Alan Lawson, a research analyst with Butler Group, said, “A number of companies have set up their business model to support a public marketplace and there are many effective public marketplaces. However, you are going to make more money from people you already know and rely on. Why take a chance on someone new when you’ve already got a supply chain that works? There is a definite shift in B2B marketplaces. There may be areas where public marketplaces will thrive… but existing supplier relationships are seen to be of more value.”

Lawson predicted that there would now be intense competition between Ariba and i2.

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This was first published in March 2001


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