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Winning in the New EconomyWinning in the New Economy
[email protected]@CommerceOne.com
14 February, 200114 February, 2001
AGENDAAGENDA
Why eMarketplace
Why Now
Why Commerce One
How…
ROI
Summary
e-volution
Dynamics of Relationships
Depth ofCollaboration
B2C
B2E
B2B
M2MBn2mB
YesterdayYesterday
TodayToday
TomorrowTomorrow
TomorrowTomorrow
2000’2000’ss
TodayToday
1990’1990’ss
YesterdayYesterday
Technology is ahead of business in the Internet revolutionCurrent business practices cannot effectively leverage
the integration that is available to us
OngoingOngoing Integration of Integration of Process and Process and TechnologyTechnology
Supply-chain systems evolution
BusinessCapabilities
(Strategy and Process)
TechnologyCapabilities
MRP OM
Fin HR
IntegratedEnterprise
FunctionalSolutions
ERP
Fin HR
MRP OM
TradingCommunity
Exchanges
ERP
Fin HR
MRP OM
ERP
Fin HR
MRP OM
ERP
Fin HR
MRP OM
ERP
Fin HR
MRP OM
Virtually IntegratedCollaborative Enterprise
ERP
Fin HR
MRP OM
ERP
Fin HR
MRP OM
ERP
Fin HR
MRP OM
ERP
Fin HR
MRP OM
CollaborativeNetworks
A Quick History of B2B E-Commerce
Buyer
B2B
Supplier
Supplier
Supplier
Supplier
BuyerBuyer
BuyerBuyer
SupplierSupplier
supplierEDI Networks
Closed, expensive, not pervasive
Brochure-warePublicize online, sell offline
Basic E-CommerceOne-to-one selling from web site
Enabling commerce through aggregationMany-to-many commerce
1996 1997 1998 1999
Marketplace ArchitectureMarketplace Architecture
BusinessService Providers
SuppliersBuyers
Bringing Value to All B2B Bringing Value to All B2B ParticipantsParticipants
Substantial ROI for All Parties
Automate Automate ProcessProcess
Automate Automate ProcessProcess
Control PurchasingControl PurchasingChannelsChannels
Control PurchasingControl PurchasingChannelsChannels
Global Economies Global Economies of Scaleof Scale
Global Economies Global Economies of Scaleof Scale
LeverageLeverageNew B2B EconomyNew B2B Economy
LeverageLeverageNew B2B EconomyNew B2B Economy
Generate New Generate New Revenue StreamsRevenue Streams
Generate New Generate New Revenue StreamsRevenue Streams
Rapid Deployment Rapid Deployment Rapid Deployment Rapid Deployment
Reduce CostReduce Costper Transactionper Transaction
Reduce CostReduce Costper Transactionper Transaction
Increase RevenueIncrease Revenueper Customerper Customer
Increase RevenueIncrease Revenueper Customerper Customer
Gain New Gain New CustomersCustomersGain New Gain New
CustomersCustomers
BuyersBuyers Service ProvidersService Providers SellersSellers
Cost of Virtual vs. Physical Commerce
Paper Electronic Savings
Purchase
Orders
$50 $5 90%
Accounts
Payable
$0.80-1.50 $0.40-0.60 25-73%
Checks $0.77 $0.25 68%
Balance
Transfer
$1.80-2.80 $0.05-0.25 86-98%
Cost per Document or Transaction
Source: JPMS estimates, corporate reports (1997).
A BreakthroughA Breakthrough
BusinessService Providers
SuppliersBuyers
MarketplaceMarketplace: A destination on the : A destination on the Internet built on a commerce Internet built on a commerce platform that brings diverse platform that brings diverse companies together to conduct companies together to conduct electronic commerce.electronic commerce.
AGENDAAGENDA
Why eMarketplace
Why Now
Why Commerce One
How…
ROI
Summary
B2B & B2C E-Commerce Growth
45 145403
954
2180
3950
7290
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
1998 1999 2000 2001 2002 2003 2004
($B)
Source: GartnerGroup/DataQuest/Leah Knight/January 2000
$7.3 Trillion Worldwide by 2004
Business-to-BusinessBusiness-to-Business e-commerce opportunity e-commerce opportunity far exceedsfar exceeds Business-to-ConsumerBusiness-to-Consumer
B2B Categories
Buyer Marketplace
Su
pp
liers
Market maker
Buyers Suppliers
Buyer-Centric
cost savings and efficiency
Public Exchanges
new revenue sources
Extranet/Sell SideExtranet/Sell Side eMarketplace ECeMarketplace EC
One To Many Many To Many
Source: Business projections from the Gartner Group
B2B growth will be extraordinary as new strategies and approaches are defined and adopted
One to Many Many to Many
Companies are now exploring the different B2B Companies are now exploring the different B2B options available to themoptions available to them
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
1998 1999 2000 2001 2002 2003 2004
Extranet/Sell Side eMarketplace EC
(US$B)
Experimentation
Exploration
Execution
45 145 403
953
2,180
3,949
7,297
2000, 25% of companiesparticipate in e-marketplaces
By 2004, B2B Internet-based commerce will reach $5.7 Trillion
2002, 70% of Buyers and Suppliers plan to participate in e-marketplaces
Source: AMR Research & Forrester Research
The Emergence of E-MarketplacesThe Emergence of E-Marketplaces
The great promise of B2B has spawned new eMarkets at an astonishing rate, but consolidation will occur
“We saw an exchange for the worldwide market in Ferris wheels recently;
we started to wonder if we are reaching the peak” – MSDW
SaturationSaturation
0
500
1,000
1,500
2,000
2,500
1998 2000 2002
# o
f eM
arke
tpla
ces
No eMarketsNo eMarkets
Land GrabLand GrabConsolidation/ Consolidation/
Value RealizationValue Realization
High-water mark 5000?
UBS Warburg Estimate
High-water mark 5000?
UBS Warburg Estimate
Today1,100+
eMarkets
Today1,100+
eMarkets
Time
End of decade10-30 players?UBS Warburg Estimate
End of decade10-30 players?UBS Warburg Estimate
AGENDAAGENDA
Why eMarketplace
Why Now
Why Commerce One
How…
ROI
Summary
#32 #32 BoeingBoeing #42 SBC#42 SBC #64 BNP Paribas#64 BNP Paribas #70 Compaq#70 Compaq #77 Deutsche Telekom#77 Deutsche Telekom #92 Mitsubishi#92 Mitsubishi #98 Credite Agricole#98 Credite Agricole #110 BT#110 BT #149 Lockheed Martin#149 Lockheed Martin #156 BellSouth#156 BellSouth #176 Disney#176 Disney
#189 #189 Wells FargoWells Fargo #190 Duke Energy#190 Duke Energy #198 PG&E#198 PG&E #199 Conoco #199 Conoco
Source: Commerce One & Fortune
#1 #1 GMGM #2 Ford#2 Ford #5 Daimler Chrysler#5 Daimler Chrysler #9 GE#9 GE #11 Shell#11 Shell #13 NTT#13 NTT #17 BP Amoco#17 BP Amoco #18 Citibank#18 Citibank #21 Siemens#21 Siemens #25 Nissho Iwai#25 Nissho Iwai #28 AT&T#28 AT&T
Global 200 Embrace B2BGlobal 200 Embrace B2B
e-volution
Dynamics of Relationships
Depth ofCollaboration
B2C
B2E
B2B
M2MBn2mB
YesterdayYesterday
TodayToday
TomorrowTomorrow
Global Trading Web
AutomotiveAutomotive
EnergyEnergy
AerospaceAerospace
TelecommunicationTelecommunication
Utility Utility ExchangeExchange
(21 Members)(21 Members)
The Global Trading WebThe Global Trading Web
$2.3 Trillion$2.3 Trillion of of Buying PowerBuying PowerConnectedConnected
55 55 CountriesCountries6 Continents 6 Continents
7000+ Buying Organizations7000+ Buying Organizations
55 55 CountriesCountries6 Continents 6 Continents
7000+ Buying Organizations7000+ Buying Organizations
E-Marketplace… E-Marketplace…
A B2B community assembled to connectA B2B community assembled to connect
enterprises togetherenterprises together
Horizontal: Horizontal: Enables and optimizes Enables and optimizes trading process trading process between enterprisesbetween enterprises
Vertical: Vertical: Streamlines supply chain processStreamlines supply chain process
New Zealand & Australia
New Zealand & Australia
UnitedStatesUnitedStates
United Kingdom
United Kingdom
CanadaCanada
Central andSouth America
Southeast AsiaSoutheast Asia
SwitzerlandSwitzerland
GermanyGermany
PortugalPortugal
SpainSpain
French BanksFrench Banks
S.Korea ConsortiumS.Korea Consortium
Sinar Mas Sinar Mas GroupGroup
Taiwan Consortium
Greater ChinaConsortium
South AfricaSouth Africa
French Consortium
SE Asia Consortium
SE Asia Consortium
Japan ConsortiumJapan Consortium
Horizontal E-MarketplacesHorizontal E-Marketplaces
TelecommunicationTelecommunication
AutomotiveAutomotive
N. AmericaN. AmericaUtilitiesUtilities
AerospaceAerospace
EnergyEnergy
Global UtilitiesGlobal Utilities Film and TelevisionFilm and Television
Metals & MiningMetals & MiningMetals & Mining
Vertical Industry E-MarketplacesVertical Industry E-Marketplaces
eHitexeHitex
Dot ComsDot ComsVerticalsVerticals
HorizontalsHorizontals
AutomotiveAutomotive
B2B Seamless Interoperation “Looks Like the Internet”
Global Trading WebGlobal Trading Web
Vehicle Manufacturing
Healthcare, Pharmaceuticals,
& Bio Tech
Building, Materials, & Construction
High Tech
Retail
Finance & Insurance
Public & Fed Gov.
Telecommunications & ISPs
Food Production & Merchandising
Industrial Products & Process Manufacturing
SME Markets
Net Market Maker E-Marketplaces
Global Trading Web
AutomotiveAutomotive
EnergyEnergy
AerospaceAerospace
TelecommunicationTelecommunication
Utility Utility ExchangeExchange
(21 Members)(21 Members)
The World’s Largest B2B Trading Community
The Internet Enhanced for
Business
The GTW Is More Than Just Technology…The GTW Is More Than Just Technology…
The Global Trading Web Association is The Global Trading Web Association is
a voluntary international business a voluntary international business association designed to association designed to
Facilitate and promote Facilitate and promote
growth of global growth of global
B2B e-commerce B2B e-commerce
30+ 30+ mega exchangesmega exchanges 100s of Net Market Makers100s of Net Market Makers 100s of service providers100s of service providers 50,000+ suppliers50,000+ suppliers 100s of thousands of buyers100s of thousands of buyers
$ 2.5 Trillion of Buying Power
AGENDAAGENDA
Why eMarketplace
Why Now
Why Commerce One
How…
ROI
Summary
Types of EngagementsTypes of Engagements
Non revenue generating
No revenue sharing deals
Defined community
One to Many
Mega Exchanges, RMPs
Revenue generating
Revenue sharing / Equity deals
Open dynamic community
Many to Many
Private Exchanges
Public Exchanges
Net Market Makers
e-Procurement
Large
NMM & Horizontal eMarketplaceNMM & Horizontal eMarketplace
Company Size
Small
Medium
Horizontal eMarketplace
NMM
for
Industry
A
NMM
for
Industry
B
NMM
for
Industry
C
NMM
for
Industry
D
Value Proposition for NMMValue Proposition for NMM
Fastest time to marketFastest time to market
Differentiate marketplace and build Differentiate marketplace and build unique branding (‘stickiness’) unique branding (‘stickiness’)
Generate multiple revenue streamsGenerate multiple revenue streams
Leverage resources and expertise Leverage resources and expertise through Commerce One’s global trading through Commerce One’s global trading communitycommunity
Net Market Maker Solution
Net Market Maker Solution
Transaction Services
Business Services Framework
Financial Services
Auction Services
Order Management
Services
Content Services
Buying Services
Builder
Bundled Services
Add-In Services
Connectivity Security Management
Net Market MakerSolution
Transaction service provided by
Global E-marketplace Partner
Net Market Maker SolutionNet Market Maker Solution
Net Market Maker Solution
Transaction Services
Business Services Framework
Financial Services
Auction Services
Order Management
Services
Content Services
Buying Services
Builder
Bundled Services
Add-In Services
Connectivity Security Management
Builder (Community Services)
• Community is key for NMM e-marketplace• Establish and maintain community of
buyers and suppliers• User Management• User self-service • Registration Process • Trading Partner Directory
Net Market Maker SolutionNet Market Maker Solution
Net Market Maker Solution
Transaction Services
Business Services Framework
Financial Services
Auction Services
Order Management
Services
Content Services
Buying Services
Builder
Bundled Services
Add-In Services
Connectivity Security Management
Catalog content Management Services through GMP Value Added Content Services to differentiate and generate revenues (ownership of catalog content):
Sourcing Parametric searching Cross-Selling Product substitution
Editorial content Editors templates Guidance on content types Editor style guides
Content Services
Net Market Maker SolutionNet Market Maker Solution
Net Market Maker Solution
Transaction Services
Business Services Framework
Financial Services
Auction Services
Order Management
Services
Content Services
Buying Services
Builder
Bundled Services
Add-In Services
Connectivity Security Management
Buying Services - for buyers
Establish a buying club Self service and ease of use Based on BuySite Portal Edition (future: buying club solution)
Order Management Services - for suppliers
Rapid adoption of suppliers into NMM community Offer new sales channel for suppliers
Buying Services - for buyers
Establish a buying club Self service and ease of use Based on BuySite Portal Edition (future: buying club solution)
Order Management Services - for suppliers
Rapid adoption of suppliers into NMM community Offer new sales channel for suppliers
Net Market Maker SolutionNet Market Maker Solution
Net Market Maker Solution
Transaction Services
Business Services Framework
Financial Services
Auction Services
Order Management
Services
Content Services
Buying Services
Builder
Bundled Services
Add-In Services
Connectivity Security Management
Auction Services
Auction Services
B2B Auction solution for dynamic sourcing and selling of items Fully hosted ASP model
Fast set-up and roll-out Easy, browser based access Privately branded for NMM
Provides market liquidity to NMM Drives transactions Attracts new trading partners Creates recurring revenue stream
Auction Services
B2B Auction solution for dynamic sourcing and selling of items Fully hosted ASP model
Fast set-up and roll-out Easy, browser based access Privately branded for NMM
Provides market liquidity to NMM Drives transactions Attracts new trading partners Creates recurring revenue stream
Net Market Maker SolutionNet Market Maker Solution
Net Market Maker Solution
Transaction Services
Business Services Framework
Financial Services
Auction Services
Order Management
Services
Content Services
Buying Services
Builder
Bundled Services
Add-In Services
Connectivity Security Management
Rapid enablement of new business services Differentiate e-marketplace Generate new revenue streams:
Self developed services Third party services GMP provided services
Rapid enablement of new business services Differentiate e-marketplace Generate new revenue streams:
Self developed services Third party services GMP provided services
Business Service Framework
Net Market Maker SolutionNet Market Maker Solution
Net Market Maker Solution
Transaction Services
Business Services Framework
Financial Services
Auction Services
Order Management
Services
Content Services
Buying Services
Builder
Bundled Services
Add-In Services
Connectivity Security Management
Leverage infrastructure, connectivity and integration services of GMP Real-time transaction processing Immediate access to trading community and Global Trading Web (GTW)
Transaction Services
Provided by Global E-marketplace Partnersas a service to the Net Market Maker
AGENDAAGENDA
Why eMarketplace
Why Now
Why Commerce One
How…
ROI
Summary
Automation of Business Processes
Broaden Customer & Supplier Reach
Increased Productivity
Improved Customer Relationships
6%
12%
16%
16%
20%
36%
42%
54%Cost Reduction
Greater Accuracy
New Revenue
Standardization
Source: Forrester Research, Inc.
Why Join e-Marketplaces?Why Join e-Marketplaces?
Moving to B2B Delivers Dramatic Supply Chain Savings
Back-End Supply Chain Cost Savings(Dollars Per Vehicle - North America)1,200
1,000
800
600
400
200
0Purchasing
ProcessInventoryCarrying
WarrantyExpense
ProductivityGains
Scrap &Rework
AlignSpecifications
ConsolidateVolume
Align w/Low CostSuppliers
TotalSupplyChain
$76
$84
$36
$67$160
$103$50
$115
$187
$302 $91
$147
$238$47
$70$94
$368
$695
$1,064
OEM
Supplier
Source: GS Equity Research
$75$75$75$75
Supplier
$1000$1000
$950$950
$3$3 $3$3
BuyerBuyer
e-Marketplacee-Marketplace
ERPERP
Total Cost: $956
How B2B E-Commerce Reduces Costs How B2B E-Commerce Reduces Costs
Total Cost: $1,150
$1,150 - $956 = $194
Moving to B2B Delivers Dramatic Supply Chain Savings
Back-End Supply Chain Cost Savings(Dollars Per Vehicle - North America)1,200
1,000
800
600
400
200
0Purchasing
ProcessInventoryCarrying
WarrantyExpense
ProductivityGains
Scrap &Rework
AlignSpecifications
ConsolidateVolume
Align w/Low CostSuppliers
TotalSupplyChain
$76
$84
$36
$67$160
$103$50
$115
$187
$302 $91
$147
$238$47
$70$94
$368
$695
$1,064
OEM
Supplier
Source: GS Equity Research
Delivering Real Business Delivering Real Business Benefits to SiemensBenefits to Siemens
4 4 operating companies currently doing thousands operating companies currently doing thousands of transactions on the click2procureof transactions on the click2procureSMSM e- e-marketplacemarketplace
300–500 current users with 30,000 planned by Q1 300–500 current users with 30,000 planned by Q1 2001 2001
Anticipated process cost savings of 75%, when Anticipated process cost savings of 75%, when fully implementedfully implemented
A business-to-business A business-to-business e-marketplace for Siemens e-marketplace for Siemens operating companies operating companies
Siemens Procurement and Logistics Services LLC
AGENDAAGENDA
Why eMarketplace
Why Now
Why Commerce One
How…
ROI
Summary
E-Commerce EvolutionE-Commerce Evolution
B2B has become the way B2B has become the way business is done todaybusiness is done today
True value is being realized True value is being realized todaytoday
Join or create an Join or create an e-marketplace todaye-marketplace today E2E
Complex Business Process Direct Goods and Services
E-MarketplacesBuying and SellingIndirect Goods and Service
Point-to-Point ConnectionsDiscreet Applications
