Article 2 covered the ways companies are utilizing B2B technologies to improve their operations. It is true that major savings and efficiencies are being garnered in the supply chain and purchasing areas … but B2B is also causing change at an industry level, including the appearance of new companies and whole new industries.

The entire B2C and C2C industry – Amazon, AOL, eBAY, Priceline, Yahoo etc – has risen purely as a result of the internet and the B2B technologies. A few years back AOL with all of their 22 million subscribers (being sarcastic here) – purchased Time Warner, who have many more than 22 million subscribers to their magazines alone (never mind CNN and their other TV channels, their music and book businesses, etc etc). Clearly B2C and C2C is a big deal.

It is fascinating to think through what allowed this all to happen. Was it simply the ability to communicate (much more) rapidly, (much more) frequently and (much more) accurately? Actually, yes! Ok, throw in easy to use browsers, but that’s pretty much it. Did Time Warner make a mistake? Perhaps but only time can tell.

Looking at industry transformation in the B2B space, you find application software companies other than SAP (Ariba, Commerce One, i2), tools software companies (webMethods, BEA Systems, Extricity), market makers (VerticalNet and Freemarkets) and B2B holding companies/incubators (such as ICGE). These companies currently have lower market capitalizations than the B2C and the C2C companies, but it is early days yet. Each of these deserve watching. SAP is either partnering with, or battling with each of these.

Unless you have been completely out of touch recently you will have read countless reports and press releases of online marketplaces springing up in a variety of industries. From the auto industry to the airline industry to the retail, computer and even the cement industry, online marketplaces have sprouted all over the map. Many of these are built on SAP, Commerce One or Oracle platforms, and use webMethods or other XML based tools. Some marketplaces are proprietary, some are public and some are closed clubs … but they all exist to allow for more efficient communication between the participants. Naturally they are being used to buy and sell, but in future look to see more and more of them used for other forms of co-operation or collaboration. Speaking of collaboration, B2B has been an absolute boon to contract manufacturers. Cisco has certainly led the way in High Tech contract manufacturing – by using the web and B2B technology.

When you boil it down, as we said at the start of Article 1, B2B is nothing fancy. The internet has provided the opportunity for everyone to communicate with everyone else instantaneously, and companies the world over are using that ability to build new businesses, and to drive costs out of their existing businesses.

Looking down the road, perhaps B2B is not actually the big story here. What really is the big story is that while SAP (ERP) allowed for integration of processes internal to a company, the internet (and B2B technologies) is allowing for integration of processes between companies … and that is what is transforming industries