May 17-20, 2006Bangkok, Thailand

ONCE Global Summit 20065 Years Later – What Have We Learned & What Lies Ahead

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KEY TAKEAWAYS

• More than half of all exchanges, consortia, and net market makers will not be around anymore in 2002 –those remaining will be much more focused

• The future of B2B will not be driven by "business models" but rather by what creates value for enterprises

• Enterprises will pursue a combination of B2B strategies and models – selecting the processes to e-enable and the right approach for each process will be key

• Winners will focus on win-win value creation, which will require different types of collaboration, depending on whether the focus is inventory, forecasting, purchasing, asset management, etc.

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The Future of B2BThe Future of B2B

Stefan Heck, McKinsey & Company

Commerce One Global Trading Web Association MeetingMadrid, March 28, 2001

Prediction of B2B in 2001

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INVISIBLE SLIDE

Forrester • 50% of Fortune 1000 involved in some electronic marketplace• On-line business trade over $2.7 billion in 2004• But: Only 1 in 20 marketplaces will survive• Only 180 marketplaces left in 2003

(= >3,600 marketplaces before shakeout)

Hoovers• 1,500 marketplaces

Gartner• 2,200 marketplaces

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DISRUPTIONS: CONSORTIA PROGRESS SLOWER THAN PLANNED

Planned Actual Consortia killers

Gain ~25% of incumbent spend

Become independently profitable company and IPO

Broad array of 10-20 services

• 3-5 suppliers in indirect goods

• 2-3% user adoption within buying organization

Running out of cash; most need second round from incumbent participants• Hard to convince talent

to join risky ventures

• Only auctions are live• Slow, expensive

integration to ERP

• Slow consortia progress favors go-it-alone ventures

• Incumbents focused on near-term bottom line; eB2B lower priority

• Prioritizing now could split up strategic alignment of members

Prediction of B2B in 2001

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DISRUPTIONS: SHIFT TO WIN-WIN VALUE CREATION LEVERS

B2B of 2000 B2B of 2001/2

• Match-making or transaction execution

• Collaborative end-to-end supply chain links such as design, sourcing, and sales/marketing

FunctionalityFunctionality

• One-off, arms-length • Long-term, partnership-focused, supply chain integration

Types of interactionsTypes of interactions

• Competitors • Supply chain partners

ParticipantsParticipants

• Market efficiency• Process standardization/

automation

• Collaborative process improvements impacting – Nonprice levers of total

cost of ownership– Costs in multiple

aspects of supply chain

Source of valueSource of value

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WHAT DOES THIS MEAN FOR MARKETPLACES?

• Imperative to go beyond indirect goods

• Enable suppliers to interact with you more easily and cheaply

GTWA a great starting pointto drive interconnectivityGTWA a great starting pointto drive interconnectivity

• Think from incumbent perspective, not your own business model

• Decide by product and process how deep to go to create distinctive value – and FOCUS!

• Outsource and partner for things you are not best in class – but integrate user experience and service

• Build more vertical expertise – do not avoid people or even distinctive physical assets

Prediction of B2B in 2001

Asia2B (HK)

Bayantrade (Ph)

Com2B (Taiwan)

Sesami (SG)Banco (Mexico)

Cable Wireless Optus (Aus)

Gate2biz (India)

NTT (Japan)

Opsiona(Spain)

PT Prime Tradecom (Portugal)

Bell South (US)

BT Marketsite (UK)

Bannaci (Latin America)

Deutsche Telekom (Germany)

Endesa (Spain)

Portugal Telecom (Portugal)

Mitsubishi (Japan)

Swisscom (Switzerland)

TD Marketsite (Canada)

Citigroup (US)

Artikos (Mexico)

Answork (France)

Conextrade(Switzerland)

Enporion Inc. (US)

eScout.com LLC (US)Exostar LLC (US)

GM TradeXchange(US) Pantellos (US)

PeopleSoft Inc. (US)

Sterling Commerce (US)

Trade-Ranger (US)

ChinaEB (China)

Pantavanij (TH)Asia2B (HK)

Bayantrade (Ph)

Com2B (Taiwan)

Sesami (SG)Banco (Mexico)

Cable Wireless Optus (Aus)

Gate2biz (India)

NTT (Japan)

Opsiona(Spain)

PT Prime Tradecom (Portugal)

Bell South (US)

BT Marketsite (UK)

Bannaci (Latin America)

Deutsche Telekom (Germany)

Endesa (Spain)

Portugal Telecom (Portugal)

Mitsubishi (Japan)

Swisscom (Switzerland)

TD Marketsite (Canada)

Citigroup (US)

Artikos (Mexico)

Answork (France)

Conextrade(Switzerland)

Enporion Inc. (US)

eScout.com LLC (US)Exostar LLC (US)

GM TradeXchange(US) Pantellos (US)

PeopleSoft Inc. (US)

Sterling Commerce (US)

Trade-Ranger (US)

ChinaEB (China)

Pantavanij (TH)

ONCE was GTWA

• Adquira• Answork• Bayan Trade BCE

Emergis• BT Ignite• BuyForMetals• Commerce One• Commerce One.net• Conextrade AG• Deutsche Telekom

• eScout• Exostar LLC Forest Express• Gate2Biz.net • GTWeb Korea• Hubwoo• Integrated Business Exchange

AB • Mitsubishi Corporation• OASIS • Optus

• Pantavanij• Pantellos Group L.P.• Peoplesoft Marketplace • Quadrem • SAP AG• SESAMI, Inc • Sterling Commerce• webMethods• World Wide Wood

Network

• Bayan Trade• BT Global Services• ChemConnect• CommerceNet• E2open• i-Faber S.p.A

(1city.biz)• iCatalog Software,

AG• OFS Portal

• Pantavanij• Perfect

Commerce• Quadrem• Schlumberger• Sparkie• Tejari• W3Net

ONCE was GTWA

• Automated Buying Process• E-Auction• E-Catalog• System Integration

• Buyers <> Sellers • Sellers pays

• Buyer Centric

Business Development

• Strategic Sourcing• Decision Support & MIS functions• Document exchange platform

• Aggregation Sourcing• SRM & SCM Tools• Contract management tools

• Buyers < Sellers• Buyers pays

• Supplier Enablement & SRM

Business Development

• Supplier Network Management

• Open Supplier Network

• Supply Market Intelligent• Supplier Rating• eRFX• BPO

• Buyers << Sellers• Buyers pays

Business Development

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Bil

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n U

SD

2000 2002 2005 Q1 2006

Total market > $15 Trillion

US B2B (2005) $6 TrillionThailand B2B (2005) $500 MillionJapan B2B (2004) $1 Trillion

ONCE Market share ~ 0.001%

What do we need to do to:• Service more e-enabled clients?• Increase penetration?

Market Penetration

• Actually inter-operate (if not merge) to ultimately become global alliance operate as single entity to maintain our value propositions

• Marketplaces will converge with financial institutes as visibility in clients’ transaction is fundamental to risk management

Looking Ahead

Looking Ahead

Clients

Internet

Integrated Suppliers

Buyers

Market Place or Market Exchange

Open API

Buying Application

Buyer’s ERP System

Extranet

Hosted Supplier

Internet

Technology

Business Model

Landscape

Thank You