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WEB TOOLS: The Opportunities Unexplored

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DQC Bureau
New Update

'Our life is

what our thoughts make it. A man will find that as he alters his thoughts toward

things and other people, things and other people will alter towards him.'

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James Allen

These are the

words that greet you as you walk into the unassuming office of a Mumbai-based

web tool developer and consultant. He is Dipen Kelani (name changed on request),

who provides individual web tools to e-infrastructure companies. These companies

in turn develop the e-marketplace for their clients. Dipen then turns back and

services the large clients for an annual remuneration. And he is ready to admit

that this is one hell of a business arrangement.

Does this have

you wondering what web tools (or e-business or e-procurement tool and

applications as they are sometimes called) are all about? These are simply an

array of software applications that help service providers in different aspects

of e-business operations like building up online exchanges that connect buyers

and sellers.

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To understand

the significance of these tools, one needs to understand what Web services are

and how the market is likely to evolve. Imagine you have an e-commerce portal.

You will find several users coming to your site and making various purchase

decisions. You would definitely like to document all these decisions to

understand your client profile. A web tool will gather all this information and

save it for your perusal.

Then again

suppose you would like to sell your products on an auction site, but have

certain parameters in mind for your buyers. A web tool will enable only those

bids that fit your requirements, saving your time and resources. In short, every

e-commerce site uses a plethora of web tools that implement various functions on

a single interface.

Food for

the skeptics

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The web tools

market has defied the laws of economic gravity to keep moving higher and higher.

And this spiraling growth has taken place because e-procurement is a popular IT

investment bringing a huge amount of efficiency and savings to a company’s

operations and bottom line.

Don't take our

word for it, here is what IDC has found out. Despite the current economic

slowdown, IDC projects that the worldwide e-procurement applications market will

grow to over $9 billion by 2004, a CAGR of 47 percent. Recently Business Week

pegged the market size at $ 428 million in 2000, with expectations of $ 2.1

billion in 2003.

Still find it

hard to believe that the e-procurement tools market can be this big and

successful? Then maybe you would like to hear from  customers who have

deployed these products in their e-marketplaces.

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Let us begin

with Affordable Interior Systems (AIS), a manufacturer of office systems and

workstations. AIS submitted a request for quotes (RFQ) for a year's supply of

edge banding plastic banding product to suppliermarket.com. The procurement team

at AIS used suppliermarket.com's RFQ builder to input all technical and

commercial qualifications a supplier would need to produce edge banding.

The portal's

SmartMatch web tool automatically searched 8000 registered supplies in its

database for appropriate candidates, who were invited to an auction. AIS thus

had a choice of vast variety of bidders, for minimal hassles, courtesy

SmartMatch. In the end, AIS got a bid at as low as $102,000, which translated in

40 percent savings for the company, all because of one web tool!

Here is yet

another case in point. A global diversified manufacturing firm faced the

difficult challenge of consolidating millions of dollars of printed circuit

board (PCB) purchases across 14 global divisions. The company wanted to

consolidate its supply base and standardize data to understand future buying

patterns, and turned to FreeMarkets.

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Using its

FullSource solution, the e-procurement applications company obtained buy-in from

14 divisions to participate in a corporate-wide event. It then standardized data

on over 1000 PCB designs across 19 divisions and introduced several qualified

suppliers from Asian countries. This brought down the consolidated supply base

from 58 to nine. This saved PCB manufacturer approximately US$10 million.

How important are web tools?

First let's

see how significant the e-marketplace is. According to IBM, the Web allows one

to move beyond one-to-one business relationships and realize the benefits of

participating in an e-marketplace model. This trend is manifested in independent

e-marketplaces where companies participate with competitors to gain benefits

like industry-wide cost savings. In all these forms, the e-marketplace model

increases revenue opportunities, lowers costs, adds flexibility in bringing new

products to market and offers customers increased and improved choices.

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This brings us

to the significance of web tools. Can you imagine a market without shops and can

you imagine a shop without counters and display? Well, web tools bring these

very components to the virtual trading site. In the words of Charles Schult,

Director Global Services, Commerce One Inc, "Web tools expedite the time of

development, implementation, deployment of the technology and capabilities. They

also introduce a standard into the equation which facilitates ease of trading

between disparate systems."

Michael

Schmitt, Senior VP and Chief Marketing Officer for Ariba says, “Our platform

of solutions provides our customers with increased efficiencies, reduced costs

and improved trading partner relationships, which significantly impact a

company’s bottom line.”  

In today’s

connected business world, companies need more than just applications to succeed

in B2B. Only a solution linked to a global B2B network can provide the seamless,

absolute interoperability they need to trade and interact effectively with all

of their partners. Internet today is used for business purposes and not just as

an information tool.

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Says Sandeep

Kalhan, Senior VP & CTO, Houston Technologies Ltd, "The tools are

extremely important in the management of transactions, from monitoring to

reporting to security. Web tools are the basic building blocks of all

transactions."

And here is

what Siva Juturi, Practice Manager-Internet Technologies, Intelligroup, has to

say. "Web tools provide the building blocks to conceptualize, create and

implement e-business transactions for any business domain. They are synonymous

to having a hammer to fix a nail on the wall," he says.

Ramesh

Loganathan, Product Manager and Architect in Pramati Technologies seconds him.

"There is a tremendous importance of web tools because by using them you

can reduce the amount of error in your programs. The cost is also reduced to

around one-third," he says. As an afterthought he adds, "And then

there is time factor as these tools save a significant amount of time."

Classifications

of tools

Web tools

conjures up many conflicting images of different software products. In reality

they can be broadly categorized as:

Browsing tools

— These are the tools that help to browse the Web to execute an e-commerce

transaction. In short you can consider them to be browsers like Microsoft's

Internet Explorer, NetScape's Explorer and Opera.

Content

authoring and multimedia tools - These are simple programs that help you to

create new content or enhance the existing ones. These include products that

help in creating graphics too. There are products like ColdFusion, Adobe

PhotoShop, Macromedia DreamWeaver, Flash and 3D Studio Max.

Scripting and

programming tools — These tools help in creating the programs that run the

applications like MS Visual Studio, Allaire JRUN Studio

Enterprise

application integration tools - Tibco, WebMethods and CrossWorlds enable the

user to trigger e-commerce transactions to the back office systems like ERP ,

RDBMS and legacy systems.

Marketplace

exchange tools or web tools, which are the subject of this article. Web tools

can be either box solutions or customized. But a lot of developers improvise on

standard software to create solutions for their clients. Players like Pramait

Technologies provide standard tools on standard-based platforms, like the J2EE

platform. The box products mostly look at the security, customer profile

capturing, monitoring aspects. They are very application specific.

But there are

others who develop solutions using these very standard products. Adam Comsof for

example used a propreitory software called Iglue, which lets a client decide

which sections of the a web page he wants the end-user to access at any point of

time. Adam Comsof often creates applications around this tool to suit the

preferences of different clients.

Similarly

Commerce One provides products with standard functionalities. But there are very

flexible and can be "tailored" to allow integration into third party

systems to meet customers requirements.

Talisma is yet

another company that has designed products to let users customize their

day-to-day workspaces by simply dragging and dropping desired fields, categories

and properties, segmenting data to show only the information each user needs.

Says Rashmi

Adukoorie, Marcom Manager, Talisma Technologies, "The open, XML-based

architecture allows for integration with other mission-critical software that

companies may already have in place. This makes it a seamless part of the

organization's technology infrastructure and causing a minimum amount of

disruption to the company's normal function and revenue generation during

implementation."

But

irrepective of the nature of the product bought, some amount of customization is

always required for any client to implement an e-business solution. Siva Juturi

points out the following reason for this:

  • Each

    customer or client has his own tailored business scenarios

  • No web

    tool suits the business & technical needs of a client completely

  • Even

    though a boxed product is a black box, it still has to enable customization

    to tune itself to clients’ requirements.

The market

takes flight

No study has

been conducted yet to find out how big the e-procurement applications market is

in the country. When asked about his opinion about the market size, Sandeep

Kalhan says, "This is difficult to quantify as the market is growing."

His colleague Bipin Ahuja, President & CEO, Houston Technologies, stands by

this viewpoint. Says he, "To quantify the market would be difficult.

However, the rate of growth in this segment is greater than the growth rate of

the industry."

Both Sandeep

and Bipin hold out hopes for the growth of this market. Both feel that currently

the domestic market may not be very big because the government regulations to

expedite the processes have just started rolling in. "The B2B and B2C

segments are small and ASP model in India has not picked up. Besides,

infrastructure also needs to be built up a lot," Sandeep adds.

This is likely

to continue for another five years, "because we are getting there in terms

of infrastructure, regulations, etc and in this timeframe, a redefinition of

terms also might happen. B2B as we know it today may become extended

enterprise," states Bipin.

Siva too

points out that the e-business tools market has been growing by leaps and bounds

over the last two to three years since corporates realized the potential of the

Internet and e-commerce for high cost savings and very low turnaround time for

implementation. "The tools are segmented and targeted towards SME as well

as large enterprises with costs ranging from few hundred dollars to even couple

of million dollars," he adds.

Shailesh

Agarwal, Director Sales, Ariba too feels that with small enterprises adopting to

this technology, the market is bound to grow steadily. "The application

market worldwide has a mass adoption. But in India only larger companies are

adopting these applications and India has not reached the mass adoption stage

yet. It would take at least two years for the Indian market to get matured to

use e-business applications extensively."

C S Jaisimha,

Country Manager Sales, Ditium Technologies too is  optimistic about the

timeframe the domestic market will take to gain a foothold. He opines that the

market is currently in a nascent stage in India, but there is no doubt that it

would carve out a niche for itself within a year.

Making hay while the sun shines

Though most

e-procurement applications and tools developers unanimously agree that the

domestic market will take time to grow, they are all looking at various

opportunities this field will open up for them and other players. Jaisimha for

one feels that ASPs will gain tremendously as they will play an important role

in promoting these kind of solutions.

Badrinathan R,

Director Sales, Web Gain, says that with the evolution of the market, three

types of players will come to the fore. The first will be people who will set up

the entire infrastructure for clients. The second would be application

developers for different components of this infrastructure. And lastly, there

will be a breed which will develop applications around the standard products to

cater to specific customer profiles.

Shailesh

Aggarwal of Ariba and Siva Juturi of Intelligroup both agree that ASPs will play

a vital role in the e-business application sphere. Siva elucidates,

"Service providers who can get training and certification from web tool

developers can evolve as consultants. They can then execute projects for

building enterprise e-commerce platforms either at offshore or onsite

locations."

As

Internet-enabled consumer goods become a reality, service providers will also be

required to integrate intelligent platforms for consumer durable companies. Says

K Dutta, Chief Marketing Officer, Business Development, Adam Comsof, "We

are talking about communication with dumb devices like refrigerators and washing

machines over the Net to execute certain intelligent programs. In short, there

will be a requirement for mandatory web tools in an online network that will

carry out the orders."

CommerceOne's

Charles Shultz agrees with Dutta. Charles feels that there will be continuous

development of capability to move more of the back-end processes, allowing for

the interchange of data between trading partners. He points out that till date,

large enterprises comprised the client base. Now service providers have begun

targeting SMEs who are keen to deploy these solutions on their portals.

Rashmi feels

that this new market will herald yet another genre of players called

'Complementary Software Partners'. These are independent software vendors whose

applications add value to the total solution and seamlessly integrate with the

vendor applications. Talisma, for instance, already has consulting partners who

provide assistance in all areas of CRM/e-business implementations. "These

partners design effective business processes as well as work closely with

customers in identifying the people, defining the process and implement the

technology that make CRM implementations successful," Rashmi adds. Talisma

Consulting Partners provide a wide range of consulting skills including business

process reengineering, project management and system integration.

Bipin on the

other hand, votes for the payment gateway providers and export orders. "The

government regulations are coming in, the payment gateways have also started

coming in now. Most of the development happening in India was for export,"

he states. Though he adds that deployment in India is yet to take off, many

companies are at the stage of testing the tools.

The optimism

displayed by these people is not misplaced. Analysts have been telling that

services will soon overtake box pushing as a business opportunity. And

ultimately, e-procurement tools business is more service-oriented than mere

trading.

Enter the

channel

As in every

segment of the IT industry, channels play an important role in the web tool

business too. They act as an immediate contact point and are trained to

troubleshoot support issues. Jaisimha of Ditium says, "We help our channel

to demonstrate the working of our solution at the client’s place, thus

ensuring a harmony in closing deals."

Bipin Ahuja

feels that the channel's role is critical, as most of the implementation in the

box products will happen through the channel. In case of products that need

customization, systems integrators will do the job.

Ramesh

Loganathan states, "We bank heavily on our channel partners or especially

the independent software vendors. We work closely with them, educating them

because they are our conduit to the customers."

This is not

surprising because the channel often works as the 'foot in the door' for large

marquee accounts. They also help in building up the mindshare especially in new

geographical areas.

Realizing

this, Talisma has worked out a channel program called the 'Talisma Partner

Program' for their distributors, VARs and systems integrators worldwide to

increase our presence in various geographical territories. Rashmi states that

the objectives of this program is to position Talisma as the premier and

comprehensive e-CRM tool of choice to organizations across the world and develop

alliances to cover all vertical markets.

Ditium too has

appointed six channel partners and has strategic alliances with systems

integrators. The latter can sell software along with their products as a

complete solution. And the company is also working out ways to empower their

channel, "We organize focused seminars on specific vertical industries,

which helps our channels and end-users identify the potential advantages in

adopting our solution," says C S Jaisimha.

The bottom

line

Web tools have

emerged as a valuable business proposition for e-infrastructure companies,

application providers and systems and network integrators. But they are all

aware that the market will take a few years to shows sturdy returns.

This is

because the shift of the client profile from large enterprises to the smaller

players has only just begun. Besides, with the existing bandwidth, web services

are yet to take off with wireless devices like mobile and PDAs.

This is why

the parties involved in the web tool business are willing to bide their time

before popping the champagne. Like one of the application provider quips,

'Everything is okay in the end. If it's not okay, at least it's not the end.'

Vinita

Suvarna-Bhatia in Mumbai with inputs from Sunila Paul in Bangalore, Mohit

Chabbra in New Delhi and Zia Askari in Hyderabad.

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