Study Sees Future in Electronic-trading Networks

A new report has concluded that the providers of Electronic Trading

Networks (ETN) are most competitive over, and often share different

opinions on, three areas of ETN services: Speed of implementation;

services provided, including overall service and integration

management; and product applicability to small and medium-size

enterprises.

Giga Information Group Inc. teamed with the Center for Digital Commerce

(CDC) at the School of Information Studies at Syracuse University in

New York to conduct a survey and write the subsequent report on the

current state and future prospects of the ETN market.

ETNs offer features including managed network services in support of

business-to-business (B-to-B) integration data exchanges, improved

security, guaranteed service levels, command center support, reporting,

and auditability, according to the report.

ETN service providers cited various areas in which they claim they

differentiate their services from the competition. However, there are

areas where no one provider lays claim to a competitive advantage. For

instance, when it comes to security and product reliability, ETN

customers have to come to view those as "expected basic product

elements" or achieving "some degree of established uniformity across

different products," the CDC's report said.

Service providers were also questioned on the prices of their ETN

services. The CDC determined that each company had a different way of

charging customers. For instance, the price for CommerceQuest Inc.'s

service is based on the "complexity of integration, estimated number of

transactions, (and the) hardware and software costs," according to the

report. IPNET Solutions Inc., however, determines its fee based on its

total number of trading partners, the report found.

While each provider may have a different system in place for charging

customers, the CDC states that "each (company) justifies its pricing

policy and claims that it works out in the best interests of their

users."

ETNs make it easier to manage data and networks compared to previous

systems "due to the simplicity, openness and transparency of the

medium," according to the report. There is little need to train

employees to use ETN systems due to the ability of companies to "use

and build over the existing technology," the report said.

There are caveats, however, because the ETN market is a relatively new

one. Firms should use caution when selecting a vendor, the report said.

Customers are encouraged to carefully study a vendor's track record.

The CDC concludes its report by stating that although the market is

still in its early stages, "the underlying logic and functionality of

ETNs makes sense and will find its justified place among firms needing

the services of an ETN provider."

The study was conducted by the CDC during the spring semester of 2001.

The school interviewed representatives of six ETN service providers to

gather information concerning issues including but not limited to

competition, flexibility, integration, pricing, security, and future

positioning.

The six providers interviewed were CommerceQuest, General Electric Co.,

GXS, IPNET Solutions, PFN Inc., Viquity Corp., and Slam Dunk Networks

Inc.

Giga Information Group in Cambridge, Mass. can be reached at +1/(781)

792-2600, or online at http://www.gigaweb.com.

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