‘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.’
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
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.
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.
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 fromÂ customers who have
deployed these products in their e-marketplaces.
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.
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.
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?
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.
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.”
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.” Â
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.
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
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.
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.”
conjures up many conflicting images of different software products. In reality
they can be broadly categorized as:
— 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.
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.
programming tools — These tools help in creating the programs that run the
applications like MS Visual Studio, Allaire JRUN Studio
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.
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.
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.
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
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:
customer or client has his own tailored business scenarios
tool suits the business & technical needs of a client completely
though a boxed product is a black box, it still has to enable customization
to tune itself to clients’ requirements.
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
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.
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.
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 isÂ 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
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.
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.
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
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."
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.
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.
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
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."
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.
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
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.
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.
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.’
Suvarna-Bhatia in Mumbai with inputs from Sunila Paul in Bangalore, Mohit
Chabbra in New Delhi and Zia Askari in Hyderabad.