Trading at Internet speed
- Article 5 of 7
- iSight, April 2006
Page 1 | Page 2 | Page 3 | All 3 Pages
When venture capitalists invested millions in companies during the dot com boom, the promise many saw was of a new way of doing business using the Internet. Most envisioned a new channel for selling goods to consumers, but others could see potential in B2B marketplaces, application service providers and through improved collaboration. The dotcom bubble eventually burst but those ideas lived on. Now, with improved business models and better technology, the Internet revolution is ready to begin again in business as part of Web 2.0.
Of the survivors of the Web 1.0 revolution, companies that use the Internet for trade with consumers were the most obvious winners. Amazon, eBay, Apple and Dell among others have all managed to turn the Web into a powerful sales channel, with Amazon alone doing $8.49 billion of trade via the web last year. But as well as being a way of selling their own goods, Amazon and eBay’s web sites allow partner companies to sell their own goods.
Amazon’s zShops, for instance, complement Amazon’s own range with products that Amazon doesn’t sell. They can also sell competing items, and if they make the sale, Amazon still takes a percentage, making it a win-win situation. The zShops get access to Amazon’s customers, the trust that Amazon has built up with those customers and Amazon’s payments and sales infrastructure. For small companies that don’t have the marketing budgets to create a successful online brands or the infrastructure necessary for online trading, it’s a way to piggyback on Amazon’s investment to create their own e-presence.
With brand awareness a major factor in online shopping, it’s no surprise that small companies are gathering together to create similar online “shopping centres” in other markets which don’t yet have an Amazon or an eBay. Many collaborate to create portals that can be used to advertise their goods, with only a few of these portals having the infrastructure necessary to sell goods. However, this needn’t be an obstacle, using web services, a standardised interface for transferring information over the web. It’s now possible to chain together third-party services such as WebPay’s credit card processing facilities using web services and other standard Internet technologies to create all the necessary infrastructure.
Primelocation is a UK portal for house-buying. Formed in 1999 by a group of estate agents, Primelocation allows participating companies to post details about their properties online. Potential purchasers can then click through to the individual estate agents’ web sites for further information.
So far, 4,000 offices have signed up for the site, which derives its income from both advertising and subscriptions. At the moment, though, the site is purely a portal and sells no properties itself. But, says chief executive Ian Springett, the portal generates a large number of clickthroughs for the offices’ own sites.
In common with Amazon, Primelocation is not fully automated for all the processes involved in dealing with suppliers, with much collaboration coming through manual entry. But in other markets, automated collaboration is much further advanced.
In the UK, life assurance and pensions brokers are already using the Internet to interface their systems during sales processes to request and provide information about the various parts of the total package customers require. Origo, which worked with many of the companies involved to create a workable messaging standard for the process, is now working on a similar standard for mortgages.
Explains MD Paul Petitt, “There are a number of interfaces that need to be supported: calls to extranets, products sourcing systems, credit reference agencies, money laundering checks, life assurance applications… At the moment, there’s not much integration.” Using the knowledge and systems created for the life assurance and pensions industry, Origo aims to devise a single XML standard that will allows these processes to happen without human intervention.
It’s this lack of a simple yet flexible single standard that has stalled many previous efforts at automated collaboration. The long-established yet under-used EDI collaboration system was both expensive to implement and too limited and inflexible to react to a rapidly changing marketplace. B2B marketplace vendors such as Commerce One and Ariba failed to achieve anywhere near their original promise because they each had their own proprietary interfaces that forced suppliers to work on the company’s terms, rather than the suppliers’ terms.
Page 1 | Page 2 | Page 3 | All 3 Pages