Public marketplaces out, private marketplaces in

We all need an evolution

The market for exchange services, such as marketplace and procurement applications, is set to be a whopper, according to IDC. The firm tells the world to expect great things from this segment of the software market because, believe it or not, marketplaces are still in the upper ranks of the minds of procurement managers.

In recent months many people have come to believe that this whole idea of e-marketplaces and e-procurement is a bit of a stinker. But IDC is adamant that this will be a big market and that, despite setbacks - which basically entails not making any money - it will see great success. And we really do mean great success.

According to IDC, this year has seen what can only be called nominal take-up in the e-marketplace space. 2001 only managed to scrape in around $0.8 billion worth of revenues for the floundering exchange services market. But optimism is running high and procurement officers worldwide are still waiting for the right solution; as the technology and practices mature, IDC reckons the sector will boom, topping $2.8 billion by 2005.

This figure puts exchange services on an annual growth rate of more than 30 per cent and suggests that these much talked about, but rarely delivered, services could become a distinct part of your business network.

But haven't we heard all of this before?

Recent years have been littered with news, analysis, predictions and studies saying that exchanges will turn the world on its head and revolutionise the way we all do business. To date, most exchanges have been a sorry failure.

According to IDC we will get over this issue. The problem to date has been the focus of the solutions. Everyone has been trying to develop massive public marketplaces and these present serious, even insurmountable obstacles, even without getting into the technical complexities associated with such ventures. The key to success, says IDC, and the way that the market is heading, is in private exchanges with manageable and committed members all working towards the same goal. ®

Sponsored: 10 ways wire data helps conquer IT complexity