B2B exchange growth slowing says Ariba

Growth in B2B exchanges has slowed down as companies prefer to develop private marketplaces, says e-procurement software supplier Ariba.

Growth in B2B exchanges has slowed, as companies prefer to develop private marketplaces, says e-procurement software supplier Ariba.

Asia-Pacific vice-president and managing director Lawrence Wee told a media briefing in Auckland yesterday that e-marketplaces have a future, but that it’s not as great as previously expected.

Wee says Asia is seeing more private marketplaces with the region’s firms strongly driven by the profit motive to make people more productive or gain easier access to markets.

“Asia continues to be a good area for Ariba to continue to invest in. The B2B phenomenon is the beginning. We see tremendous opportunity for ourselves and our competitors. There are many public sector initiatives not just in themselves, but also governments promoting e-commerce,” he says.

The California-based company has its own Ariba Commerce Services Network, which has 10,000 members. It allows the firm’s Kiwi suppliers to buy over the world.

“We are focusing back on our core competency - where Ariba grew up in 1996 - e-procurement in the corporate world,” says Wee.

The shift was previously heralded in April, when Ariba produced “not fantastic” quarterly results - a worldwide loss of $US48.3 million, compared with a second-quarter loss in 2000 of $US11.5 million. But revenue increased from $US40 million last year to $US90.7 million.

New quarterly results are due on Friday, but Wee says he could not provide any figures as the company is in the “quiet period.” But he says Ariba will announce “some big company wins”.

Analysts IDC last month estimated Ariba as the world leader in ecommerce applications, with an applications revenue of $US375 million in 2000. It adds to an earlier IDC estimate of Ariba having 36% of the worldwide buy-side eProcurement market segment.

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