B2B Exchanges: Future Hopes, Current Doubts

Exchanges play a central role in business thinking and strategy development for business-to-business (B2B) e-commerce. Business attitudes toward exchanges, however, have been shifting and remain ambivalent.

Three years or so ago, entrepreneurs and businesses first became interested in public exchanges as an attractive way to connect companies with their suppliers or business customers. Dozens of independent public exchanges were launched - and thousands proposed - to capture this business interest.

Two years ago, many large companies became nervous about the concept of such central, industrywide venues operating under the ownership of a new independent company. Their response was to create public industry-specific exchanges owned by consortia of companies in that industry.

Then, a year ago, businesses started to get concerned that public exchanges might somehow interfere with the relationships between businesses and their customers - that they will eliminate competitive advantages the businesses enjoy in their supply chain, or will never become reliable or secure enough to provide a sound foundation for valuable partner relationships.

As a result, many companies have created private exchanges that they operate either individually or with a handful of partners to facilitate online interactions with suppliers and/or customers. Still, all three of types of exchanges coexist uneasily and compete with one another for corporate mindshare.