CS155a: E-Commerce Lecture 13: October 23, 2001 B2B E-Commerce.
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Transcript of CS155a: E-Commerce Lecture 13: October 23, 2001 B2B E-Commerce.
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CS155a: E-Commerce
Lecture 13: October 23, 2001
B2B E-Commerce
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Electronic Commerce Definitions
Electronic commerce is a set of technologies, applications, and business processes that link business, consumers, and communities.– For buying, selling, and delivering
products and services– For integrating and optimizing processes
within and between businesses.
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Definitions (continued)
• B2B Commerce: “Interactions relating to the purchase and sale of goods and services between businesses.” Estimated to be 70% of the US economy!
• B2B electronic marketplaces (“B2Bs”): Systems of suppliers, distributors, customers and infrastructure and service providers that use the Internet for communications and transactions.
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Business Models for Electronic Commerce
• Stores and malls• Virtual communities• Purchasing center• Auctions and reverse auctions Value-chain service provider Value-chain integrator Collaboration and concurrent engineering• Information brokerage
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Traditional Enterprise-Centric View
Enterprise
SupplyChain
IndirectProcurement
Customers
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Internet Business Models and Integration
Requirements
The Internet enables new models for marketplaces, trading communities, outsourcing, open sourcing, buying consortia, supply chain integration and “virtual enterprises” that are fundamentally different.
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Networks of Commerce Communities
ProcurementOutsourcing
AssemblyOutsourcing
Enterprise
Markets
Supply Chain
Indirect Procurement
Customers
Distribution
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Specific B2B Tasks
• Search• Source• Specify• Negotiate and bid• Order• Receive goods and services
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“Horizontal” B2Bs
• Serve many different industries.• “Product focus” is broad.• Examples
– HotOffTheWire (consumer goods for small and midsized retailers)
– NTE (National Transportation Exchange, which sells unused trucking capacity to businesses)
– equalFooting (obtains volume discounts for small businesses through “virtual aggregation”)
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“Vertical” B2Bs• Serve a single industry• Product focus is on “the supply
chain of one product category” or on “expertise and in-depth content knowledge for one industry.”
• Examples– Covisint (automotive)– MetalSite– BuyProduce
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Revenue Models
• Transaction-related fees– Per-transaction– Flat (e.g., monthly, yearly)– Value-based
• Membership/Subscription fees• Value-added service fees
– Logistics (e.g., shipping)– Financing
• Advertising and Marketing Sales of Data and Information
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Participant Ownership• Advantages
– Economies of scale– Technical expertise and content knowledge– Incentive to maintain high-volume participation
• Disadvantages– Barriers to niche-player and new-player entry Anti-trust Issues
• Alternatives– Ownership by technology firms– Ownership by 3rd party investors, e.g., venture
capitalists
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Commerce One
• Full Name: Commerce One, Inc.• Employees: 3,766 (2000) • Stock Price (CMRC):
– $2.53 (as of mid-day 10/22/2001)– 52-week range: $2.09 to $84.12
• Revenues in 3Q 2001: $81 mil.• Business Area: E-Marketplace
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Commerce One: Products
• E-Market Solutions: MarketSet™, MarketSite™, and Net Market Maker
• Enterprise Buyer: Automates the procurement cycle
• Services: Strategy and technology consulting, Integration, Educational Services, etc.
• Customers: Companies (including CitiBank, Compaq, Nokia, and Staples) and Exchanges (including Covisint)
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Commerce One: Brief History
• 1994 Founded as DistriVision Development Corporation
• 1997 Re-launched as Commerce One• July 1999 IPO ($21/share, pre-split)• Mar 2000 Historic Peak of Stock Price
($135.625)• Q3, 2000 Starts earning money• Q3, 2001 Net loss of $0.24/share
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Commerce One (CMRC):Stock Price
Traded on NASDAQ; Source: Quicken.com (10/22/2001)
[S] = Stock Split
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Commerce One:Quarterly Revenues
Source: SEC Filings
0
50
100
150
200
250
Reven
ue (
$ m
il.)
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ARIBA
• Full Name: Ariba, Inc.• Employees: 1680 (2000) • Stock Price:
– $2.93 (as of mid-day 10/22/2001)– 52-week range: $1.75 to $173
• Revenues in 3Q 2001: $85,328,000• Business Area: integrated
commerce solutions and web-based commerce services
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Ariba: Products
• Procurement systems for managing buying, selling, and marketplace eCommerce processes
• Product series include Ariba Buyer, Ariba Marketplace, Ariba Dynamic Trade, etc.
• About 40% sales from technical support, training, and other related services
• Major clients: DuPont, Federal Express, Chevron, Hewlett-Packard, etc.
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Ariba: Brief History• Sept 1996 Founded• June 1999 IPO• Q4, 99-00 Revenue up 687% from
same period last year• Sept 2000 Historic Peak of Stock
Price ($168.75)• 1Q 2001 Starts earning money
($0.05/share)• 3Q 2001 Net loss per share: $0.10
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Ariba (ARBA): Stock Price
Traded on NASDAQ; Source: Quicken.com (10/22/2001)
[S] = Stock Split
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Ariba: Quarterly Revenues
Source: SEC Filings
0
20
40
60
80
100
120
140
160
180
Reven
ue (
$ m
il.)
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Covisint • Founded officially Dec 11, 2000 by Ford,
General Motors, Nissan and Renault.• Started originally as a vision group
12 months earlier.• B2B e-business exchange allowing
automotive original equipment manufacturers (OEMs) and suppliers to speed the flow of material through the supply chain
• If Covisint lives up to its promise, consumers will eventually be able to custom-configure a car -- from engine size to upholstery color -- and drive it home a week after placing their order.
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The Exchange• Virtual Project Workspace
– Desktop application that allows members to buy and sell automotive parts, supplies, and services
• Procurement– Auctions: Seller and Buyer auctions– Catalogs: Custom and Community
• Supply– SupplyConnect: Access to every step of the
supply process• Quality
– Advanced Quality Planner: minimizes quality defects by web-enabling management of quality process requirements and deliverables.
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Revenue Model• One-time licensing fees for members• Flat transaction fees• Variable-rate transaction fees• Additional fees for auctions and
catalogs• Covisint hopes to tap into the $1.3
trillion of purchased goods and services in the global automotive industry (eventually).
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Unresolved Issues• Initially there won't be transparent, real-
time, two-way supply-chain connections between the auto companies and all tiers of suppliers – no real improvement.
• Not all auto companies and suppliers will be signed up.
• Auto companies are the only ones to set the rules for the exchange.
• Rising tensions between software partners as Covisint delays final specs for application development.
• Other similar exchanges are planned by other automotive companies.
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Reading Assignment forOctober 25, 2001
“A Technical Introduction to XML,” Norman Walsh, on XML.com(http://www.xml.com/pub/a/98/10/guide0.html)