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Visions and Trends of Tomorrow’s B2B

Visions and Trends of Tomorrow’s B2B. James MacAonghus Analyst, Jupiter MMXI. Agenda. Sell Cost Savings and You’ve Missed the Point Replace Custom Build With Packaged Software Where Now For Net Markets. Sell Cost Savings and You’ve Missed the Point.

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Visions and Trends of Tomorrow’s B2B

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  1. Visions and Trends of Tomorrow’s B2B James MacAonghusAnalyst, Jupiter MMXI

  2. Agenda • Sell Cost Savings and You’ve Missed the Point • Replace Custom Build With Packaged Software • Where Now For Net Markets

  3. Sell Cost Savings and You’ve Missed the Point

  4. Integration Requirements Will Drive Infrastructure Investment … (in billions) Source: Jupiter Net Market Infrastructure Forecast (11/00) Page 3 of 18

  5. … But Still Early Stages of Marketplace Development AmbitiousClimber Teens Young Adult Maturity Adolescence Infancy Highly IntegratedFeatures Collaboration Multi-Market Basic Exchange Functions Expanded Content Globalization Systems Integration Mechanisms Localization Adjacent Market Collaboration Advanced Search Transactional/BehavioralAnalyses Net Market progress to date Remaining phases to maturity Source: Jupiter Research Page 4 of 18

  6. Sell to Early Adopters – Rest Will Follow Effectiveness Cost Late Followers Early Adopters Early Followers Laggards Page 5 of 18

  7. Selling Cost Savings Is Self-Limiting Effectiveness Efficiency Page 6 of 18

  8. Value Propositions for Competitive Advantage • Cycle time • Brand substantiation • Quality • Capacity • Capital utilization • Customer satisfaction • Productivity • Regulation Page 7 of 18

  9. Risks, Cost, ROI Make Competitive Advantage More Attractive + Current Phase of B-to-B Value Motivators Competitive Advantage 2003 Phase of B-to-B Value Motivators - - + Cost Savings Source: Jupiter Research Page 8 of 18

  10. Cisco’s B-to-B Investment Roadmap Connecting to the Supply Chain Customer Facing New Product Launch • Cycle time down from 6-8 weeks to 1-3 weeks • Lowered inventory • 55% of Unit Volume Shipped Without Cisco Touch • 25 Days to 10 Days’ Reduction in Engineering Changes • New Product Introductions Accelerated by 25% • 80% of orders done online • Customer satisfaction now 4.25, up from 3.4 • Substantially fewer errors Source: Jupiter Research Page 9 of 18

  11. Replace Custom-Build with Packaged Software

  12. Custom Build v Packaged, Over Time + Packaged Applications Functionality Custom Build - - + Time Source: Jupiter Research Page 11 of 18

  13. Critical Valuable Less Valuable Most Important Value-Added Services Depend upon the Market Being Pursued Buyer Market Buying From New Suppliers Buying From Existing Suppliers Escrow Training Mediation Insurance Tracking Negotiation Supply Chain Integration Content Security Value Added Services Chat and Customer Services Ratings Credit Inspection Community Shipping Product Explanation Collaboration Guarantees Source: Jupiter Research Page 12 of 18

  14. Technologies Map to Market Mechanisms Source: Jupiter Research Page 13 of 18

  15. Reasons to Use Packaged Applications • Despite team growth, competitive advantage • Time-to-market for new functionality • Net market makers should focus elsewhere • Post-merger integration • Scale and expansion Page 14 of 18

  16. Where Now For Net Markets?

  17. ISMs First to Define Future Value Propositions • Reduce cycle times – table stakes • Increased capacity and utilization • Industry-wide demand/supply views • New financial instruments • The Network Effect Page 16 of 18

  18. Industry Sponsored Marketplaces and Independents • Technology acquisition - GHX • Creation of turnkey solution - GoFish • Acquisition of liquidity services – e2open • Supply chain efficiency - MetalSite Page 17 of 18

  19. Where Do We Go from Here? • Massive consolidation – liquidity, partnerships will determine survival • Value-added services move focus beyond matchmaking to completing entire life cycle of transaction • Don’t ignore local and SME markets • Private trading networks emerge Page 18 of 18

  20. Thank you jamesm@jup.com

  21. Custom Build Way More Common Than Package Software Fig 5: What technology solution(s) did you use to create your Net Market?

  22. Transactions Within Standalone Marketplaces Will Shift to Inter- and Intra-Marketplace Transactions Are you linked or do you plan to link to other net markets? Percentage of Markets Linked in Future Percentage of Markets Linked Today Source: Jupiter Executive Survey (10/00); n=90, (US only)

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