Page 28 - DCAP306_DCAP511_E-COMMERCE_AND_E-BUSINESS

Unit 2: Business Models of E-Commerce

2.2 Business-to-Business (B2B) E-Commerce

Business-to-Business (B2B) refers to the transactions between businesses such as, two firms or between a
manufacturer and a wholesaler. B2B e-commerce accounts for more than 94% of all e-commerce
transactions conducted over networks. It is restricted to business partners and uses secure procedures
based on firewall, encryption, and authorization level with payment by predetermined credit terms.
2.2.1 B2B Market Places
Internet based B2B e-commerce is done by large companies through industry sponsored marketplaces
and private exchanges. In some cases, organizations sell their products to business consumers through
their own Web sites.
According to a survey conducted on 25 Industry Sponsored Marketplaces (ISMs) that was published in
the industry, ISMs had only a small percentage of business-to-business transactions. A reason for this is,
they had problems in convincing buyers and sellers to use the marketplace. As companies did not
prefer customized designs through marketplaces, they made use of such marketplaces to buy products
and to manage the supply chains only.
The B2B market has two primary components. They are e-infrastructure and e-markets. E-infrastructure
is the architecture of B2B and primarily consists of the following:

1. Logistics such as, transportation, storage, and distribution.

Procter and Gamble provide Logistics as part of their infrastructure management.

2. Application service providers who help in deployment, hosting, and management of packaged
software from a central facility.

Oracle and Linkshare organizations provide main application service.

3. Outsourcing of functions in the process of e-commerce such as, Web hosting, security, and
customer care solutions.

EShare, NetSales, iXL Enterprises, and Universal Access are some of the
organizations that provide outsourcing services.

4. Auction solutions software for the operation and maintenance of real time auctions in the Internet.

Organizations such as, Moai Technologies and OpenSite Technologies provide
auction solutions software.
5. Content management software for the facilitation of Web site content management and delivery.

Interwoven and ProcureNet are some of the organizations that provide content
management software.

6. Web-based commerce enablers, which provide solution framework and manage dynamic services.

Commerce One is browser-based, XML-enabled purchasing automation software.

E-markets are Web sites where buyers and sellers interact with each other and conduct transactions.
The more common B2B examples and best practice models are IBM, Hewlett Packard (HP), Cisco, and
Dell.

Cisco receives over 90% of its product orders over the Internet.
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