The Yankee Group Takes a Pragmatic Look at the $3 Trillion BtoB Opportunity.
No matter how grandiose the predictions of what the B2B market is to become over the next several years, the number $3,000,000,000,000 by the year 2004 will probably take you by surprise! That figure ($3 trillion) is what industry analysts at The Yankee Group (Waltham, Mass.) estimate transaction values will reach as they migrate to electronic exchanges over the next four years. An upcoming Yankee Group report analyzes e-commerce transaction migration, identifying key dynamics driving adoption trends within industries and the economy as a whole.
The newly published report, “How Big is Big? A Pragmatic Review of the $3 Trillion BtoB Opportunity,” includes the following predictions: E-marketplace transactions will generate nearly $850 billion of the total $2,780 billion in BtoB e-commerce by 2004. On average, companies are expected to purchase nearly 30 percent of goods and services electronically by 2004. In certain industries, this figure is expected to move as high as 50 percent. The share of production essential goods and services exchanged online was limited in 1999, despite the fact that these products represent the bulk of inter-company transactions. Two percent of cross-industry MRO products were exchanged electronically in 1999. That share is expected to increase to approximately 40 percent by 2004.
"The basic materials companies use to get through a day like paper and PCs will drive e- marketplace growth. The same will be true for commoditized production materials. More complex products are more likely to move through point-to- point systems," says Jon Derome, a senior analyst with the Yankee Group's BtoB Commerce & Applications (BCA) Planning Service. "The strength and intention of industrial power players will also determine e-commerce trends. E-marketplace intermediaries will influence certain industries, but existing corporate leaders will develop and execute e- business strategies, limiting intermediary potential."
The Yankee Group created a forecasting model to assess BtoB e-commerce potential by industry, according to product complexity and exchange environment. Ratings were based on purchasing volumes, industry concentration, supply-chain inefficiency, logistic complexity, existing e- commerce strategies and technology infrastructure, and feedback from end-users and technology vendors. The Yankee Group analyzed 40 industries, which approximate the total potential U.S. BtoB market. This Report is available immediately from the Yankee Group's (new window) BtoB Commerce & Applications Planning Service.