Coke may be it, but there are a lot of steps in the process before we get those red cans in our hands. Sugar must be bought and so must the carbon dioxide. Coke then sells its syrupy mix to the bottlers who must buy glass and aluminum. The distributors then sell to retailers who, in a single last step, sell the product to us as consumers. Sure, the entire chain of events is still dependent on that final consumer purchase, but our purchase is but the last link in a very long value-added chain. Every step along the way is a step that can be made more efficient by e-commerce, and there are simply more steps in the B2B part of the chain than there are in the B2C part.
Probably the most laughable argument coming from my buddy Rick was the notion that B2C will see larger growth than B2B. Even if B2C e-commerce does manage to triple over the next three years (a reasonable expectation, in my opinion), most estimates show B2B e-commerce growing some tenfold between now and 2003. B2B is a bit behind B2C in its lifecycle, but that also means the sharpest growth is still ahead for B2B.
Rick is correct to point out that there is a shakeout happening in the B2C realm while B2B companies are springing up everywhere. Perhaps this is because the market sees that the addressable B2B market is much larger and potentially much more lucrative than in the e-tailing world?
Rick then points out that the B2B sites won't cast as wide a net as the consumer websites. So what? It doesn't matter. Those that do visit a B2B hosting site are motivated buyers with multimillion-dollar spending budgets. I'm sure VerticalNet couldn't care less if I visited their Machine Tools online or their Hydrocarbon online sites. For these sites, no, we as consumers do not matter.
Finally, Rick's notion that companies will buy one round of B2B software and then be over with it is completely off base. Software will continually be upgraded, and there is the lucrative service and consulting services that horizontal B2B companies can offer. B2B companies will have their customers locked in fairly well, and the switching costs across the industry will be high. Meanwhile, in the B2C realm, it's as easy as clicking onto another site to shop from another e-tailer.
But if there's one take-home point I'd like to make, it is this: B2B as a whole is going to be much larger than B2C e-commerce, and most companies in the B2B space are just starting to build their businesses. It's going to be an exciting couple years to see how the cards fall, and I think the odds are strongly with today's batch of B2B companies.
This Week's Duel
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