PracticePeople In PracticeOnline exchanges set to soar

Online exchanges set to soar

One in three US companies with more than $1bn in revenue will implement an online trading exchange by 2005, according to software researcher AMR.

AMR analyst John Bermudez said that companies will begin to build industry sector-specific trading exchanges using existing electronic marketplace platforms during this year. ‘We have already seen vendors such as Ariba and Commerce One providing the platforms, and these will be tied into wireless [platforms] as those things build out,’ he said.

In its predictions for the US software industry, AMR expects that the supply chain management market will be worth $7.8bn (£11.35bn) in 2001, with inventory management, order fulfilment and supply chain planning as crucial applications. The researcher also predicts that combined spending on ecommerce software and services will total more than $56bn (£81.54bn) by 2005.

AMR believes that businesses will begin to drive large ecommerce projects this year. ‘Leading global companies are still in the early stages of their ebusiness investments, but are fully committed to initiatives that will drive revenue and efficiencies to make 2001 a year of innovation and excitement,’ said Bermudez.

‘Customer focused applications, wireless and business-to-business marketplaces are just a few of the rapidly changing and growing ebusiness segments dramatically affecting companies today,’ he added.

In other areas of the software industry, AMR believes that by 2002, 40% of enterprise application service providers will fail or be acquired, and that the value of retail applications will increase by 40% to reach $4.4bn (£6.4bn) in 2001.

Product lifecycle management will be one of the hottest areas for application licence revenue, boasting growth rates of more than 50% as manufacturers aggressively look to reduce time to market for new products.

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