Nov 23

After the big hype in 2001, most – almost 70% – of the top 20 mega-industry consortium eMarketplaces (funded with 40 to 200M€) created at that time have disappeared, in a way or another (Bankrupcy, merger, liquidation or radical change of business model), in general not being able to reach profitability. I know what I talk about (…). Well, I was just wondering which ones have survived, without intenting or pretending to be exhaustive.
The first thing I would like to do still is to give a definition of a . The expression has been mis-used quite regularly. A eMarketplace is an online portal where buyers can find and make business (tendering, negotiating, transacting) with buyers and vice versa. From this stand point, for example, is not a eMarketplace, and all the ones that evolved horizontal – like e2open – , are not taken into consideration hereafter.
Now, what do we have? To review the situation, I used a fairly good french website called Journal du Net where a list -more or less accurate – is available since 2001…but not updated. There we go:

  • Automotive: Covisint,
  • Manufacturing: SupplyOn (GE: Bosch, Continental, INA, SAP, ZF, Siemens)
  • Aerospace: Cordiem, MyAircraft.com, AeroXchange (US/WW: Founded by 13 airlines, Aeroxchange has been joined by 20 other airlines)
  • Chemical: Chemconnect (WW: more than 50 investors for a current total funding of $180M)
  • Construction: Constructeo
  • Defense: Exostar (US/WW: BAE SYSTEMS, Boeing, Lockheed Martin, Raytheon and Rolls-Royce)
  • Mining: Quadrem (US/WW: Alcan Inc, Alcoa Inc, Anglo American plc, Barrick Gold Corporation, BHP Billiton, Companhia Vale do Rio Doce (CVRD), Corporacion Nacional del Cobre de Chile (Codelco), De Beers Consolidated Mines Ltd, Glencore International AG, Imerys, Inco Limited, Newmont Mining Corporation, Noranda Inc, Penoles, Phelps Dodge Corporation, Rio Tinto, Votorantim Group, WMC Limited)
  • Oil and Gas: TradeRangers
  • Retail: Transora, CPGMarket, Agentrix (WW: Merger of GNX and WWRE)
  • Steel: BuyforMetal, steel24-7 (WW)
  • Utilities: Aquadia, (not vertical anymore), Pantellos, Eutilia (EU: will close in 2007)

I can’t say much about the survivors but that they are all ‘global’, claiming more than 20.000 users and ALL founded in US, apart from SupplyOn. Well done America!

Maybe another thing I would add. Consortium-eMarketplaces funded by fealthy-rich/not-really-under-cost-pressure companies didn’t make it (Oil and Gas, Utilities…). Those companies preferred to build their own private-supplier-portal as they were rich enough to 1) afford ‘sitting’ on their initial multi-million investment, 2) to liquidate the marketplace and 3) invest again some millions in an internal and more secured solution.

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2 Responses to “Industry consortium eMarketplaces. Who are the survivors?”

  1. 1. Raul Vergara Says:

    Jean-Philippe:

    I am glad to see people follow up on the eMarketplace activity. I have been working in this space for 5 years now and it has been an interesting experience.

    I dont understand from your post why you rule out cc-hubwoo (who as the report says acquired Trade-Ranger – not traderangers) from the list but you still include companies like Quadrem. Their offering is very similar, and they both do not limit to be a SaaS. Same thing IBX maybe Elemica and others. They are all very similar with differences coming more on the how good their solutions are, onboarding processes, number of suppliers in it, global reach, customer base, etc.. functionality wise…. not much difference.

    Maybe you are referring to what these marketplace were a couple of years ago. I think you should revisit your post or give a better definition to what eMarketplaces are for you, as the post might be misleading in this aspect.

    It is always good to see some action in blogs about the eMarketplace space. 2007 and 2008 will be very interesting years to watch.

    Best Regards,

    Raúl

  2. 2. jp.massin Says:

    Thanks for your comment Raul. Indeed, it’s quite satisfying to have some response back from the ~100 readers that are currently coming every-day on this blog.

    I appreciate as well your comment about defining more precisely what a e-marketplace is, as I did feel, when writing this post, it might raise some misunderstanding.

    So, let me give you a bit more details about what I consider to be an e- marketplace. I wrote “a B2B e-marketplace is an online portal where buyers can find and make business (tendering, negotiating, transacting) with buyers and vice versa”: What is important is that, when a company (as a buyer or a supplier-side customer) connect to the marketplace this company can reach (exchange information with) any of the players connected as well on the e-marketplace. This looks obvious but in many cases, once you are connected to the ‘so called e-marketplace’ you can only reach your current suppliers (or only the one you specified) and no one-else. In that case and according to me, this is not any longer an e-marketplace: it is a private portal (1 buying organisation connected to many suppliers – called as well private e-marketplace), potentially outsourced to a third-party like…Hubwoo.

    Hubwoo is offering private e-marketplaces to its customers and that’s why I don’t consider Hubwoo as an e-marketplace. I wouldn’t consider IBX as an e-marketplace for the same reason.

    Look at the tagline of Hubwoo: “cc-hubwoo is the leading global provider for “Source-to-Pay” electronic solutions and Supplier Network Management”… the word e-marketplace (which was there before) has desappeared.

    Elemica however looks very much as an e-marketplace, being Supplier-centric and not buyer-centric, i.e. connecting maybe all suppliers to all buyers but I can’t say it for sure. Actually and amazingly enough, I went on their website and try to find the word e-marketplace…guess what: I didn’t find it so…might not even been one neither.

    For sure, the word ‘e-marketplace’ has been very much used during the hype in 2000. Nowadays it is not popular at all any more. But the concept is still alive and hidden behind another misleading and marketing term, used by non-e-marketplace like Ariba, Perfect, Hubwoo: the Supplier Network, The Open Supplier Network (Perfect), The Ariba Supplier Networt (Ariba), the cc-hubwoo supplier network… Hope this helps.

    Regards,

    Jean-Philippe

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