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Study: Business-to-business sales to reach $6 trillion by 2004

Study: Business-to-business sales to reach $6 trillion by 2004

AMR Research in Boston last week released a bold forecast setting online business-to-business sales at $5.7 trillion by 2004, up from an estimated $215 billion in 1999.

The firm believes that Fortune 2000 companies have the proper information technology infrastructure in place and are ready to cause an explosion in the online B2B market. AMR believes that B2B e-commerce will top $1 trillion in 2002 and continue to grow exponentially from there.

The report runs counter to other US reports, which suggest that the B-to-B e-commerce explosion has been less robust than many had hoped and that electronic date interchange (EDI) transactions continue to dominate the B2B world despite the looming threat of XML-based Web interchanges.

John Bermudez, AMR's vice president of research operations, said his company set its $5.7 trillion figure assuming only a 29 per cent market penetration for e-commerce, which he characterised as conservative.

"We agree people should rub their eyes at these figures if they don't believe this is coming, but I think a lot of those people are in denial," he said. "If they can get industry leaders to own up to how aggressive they're being, see if [those leaders] think a 29 per cent adoption rate is too much."

Bermudez said corporate giants such as General Electric have seen the success of Dell and Cisco in the online sphere and they will look to follow that model.

"If these big guys go, the others will have little choice," Bermudez said. "If they want to do business, they have to follow that lead."

Bermudez said he believes that EDI operations will be converted to Web operations over time and that electronics, service and manufacturing companies will all plug into an Internet B2B platform. Some 80 per cent of the dollar value of all electronic transactions among the Fortune 500 companies is currently conducted via EDI, the report estimated.

"We could see a wealth redistribution," he said. "A lot of companies won't take this seriously until it's way too late, and they'll be left behind."


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