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Business-to-business (B2B) e-commerce will grow at aggressive rates through 2004, causing fundamental changes to the way businesses do business with each other, according to GartnerGroup, a leading IT advisory firm.

According to Gartner, the worldwide B2B market is forecast to grow from $145 billion in 1999 to $7.29 trillion in 2004. By 2004, B2B e-commerce will represent 7 percent of the forecasted $105 trillion total global sales transaction. (See Figure 1, Worldwide Business-to-Business Market Forecast, 1999-2004.)

The catalyst for B2B e-commerce will be the activities of so-called "e-market makers". According to Gartner, an "e-market maker" is an organization that develops a B2B, Internet-based, e-marketplace of buyers and sellers within a particular industry, geographic region, or affinity group. Among the best-known e-market makers today are Chemdex, VerticalNet, Altra Energy Technologies, Paper Exchange, Instill, PlasticsNet, and Commerce One's Marketsite.net.

Gartner projects that these e-market makers will facilitate $2.71 trillion e-commerce sales transactions in 2004, representing 37 percent of the overall B2B market, and 2.6 percent of forecasted worldwide sales transactions.

Worldwide Business-to-Business E-Commerce Market Forecast, 1999-2004
Worldwide Business-to-Business E-Commerce Market Forecast, 1999-2004 (Source: GartnerGroup)

GartnerGroup analysts add that e-market makers will have a critical but subtle impact on transactions that flow through brick-and-mortars' sell-side initiatives. These sell-side initiatives are defined as including extranets, B2B Web storefronts, Electronic Data Interchange (EDI), and flat file transfer over the Internet, as well as related e-commerce activity that allows a seller to leverage the IP network as a channel to its buyers.

The impact of e-market makers and the evolving business models surrounding the multitrillion dollar B2B e-commerce market will be explored in GartnerGroup's soon-to-be-released suite of B2B e-Market Makers advisory services. For more information on these services, contact the GartnerGroup at http://www.gartnergroup.com.

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