IDC’s Rick Villars Tells the U.S. Senate eMarketplaces Will Help Small Businesses Establish Themselves as Online Sellers

FRAMINGHAM, MA – MAY 25, 2000 – IDC's Internet and eCommerce Strategies Vice President Richard Villars spoke last week at a forum run by the U.S. Senate Small Business Committee titled B2B: An Emerging e-Frontier for Small Business. He discussed the vital role emarketplaces will play in establishing small businesses' place as business-to-business sellers on the Internet.

"eMarketplaces offer the best alternative for small businesses that don't have the capital, the technical expertise, or the name recognition to set up and successfully run a standalone ecommerce site," Villars said. "eMarketplaces provide a community of buyers and sellers and the mechanisms that will finally enable small businesses to cost-effectively participate as sellers, not just buyers, in national and global markets."

According to IDC, an emarketplace is a third party that establishes itself as a community builder where buyers, suppliers, and third parties can exchange information and conduct business via a shared catalog, an open auction site, or an exchange.

"Small businesses – firms with under 100 employees — expect the Internet will account for a growing proportion of their revenue, either directly or indirectly, over the next two years," said Raymond Boggs, vice president of Small Business and Home Office research at IDC. "In 1999 only 7% of small firms said 5% or more of their revenues were Internet related. But that 7% grew to 16% when we asked about what they expected in 12 months, and grew to 25.5% when we asked about 24 months out. Small businesses are itching to capitalize on the Internet, but many lack the broadband connections they will need."

IDC believes there is a common misconception about U.S. small businesses' Internet presence. By the end of 2000, more than 60% of U.S. small businesses will be connected to the Internet; however, only 16% will be connected through permanent high-speed network connections.

"The connection profile of a business tells a lot about its real use of the Internet," Villars added. "Without a permanent connection, these businesses have no real-time presence on the Internet and can't be aggressive sellers of goods and services. Small businesses play and will continue to play an important role as buyers of goods and services via the Internet. However, the ultimate goal of any business is to sell something, and as sellers, small businesses play only a marginal role."

To view Villars' statements, please visit http://idc.com/eBusiness/ecommerce/b2b051800.stm. Bringing Small Businesses to the B2B Dance (IDC #B22229) further explores the role of emarketplaces in small business B2B ecommerce. The IDC Small Business Internet program also features a number of documents that offer in-depth insight and analysis on this market segment, including U.S. Small Businesses on the Internet: Market Forecast and Analysis (IDC #B21762) and Generating Revenue through the Internet: Small Businesses Today, Next Year, and Two Years Out (IDC #B22139).

About IDC

IDC delivers dependable, high-impact insights and advice on the future of ebusiness, the Internet, and technology to help organizations make sound business decisions. IDC forecasts worldwide markets and trends and analyzes business strategies, technologies, and vendors, using a combination of rigorous primary research and in-depth competitive analysis. IDC provides global research with local content through more than 500 analysts in 43 countries worldwide. IDC's customers comprise the world's leading IT suppliers, IT organizations, ebusiness companies, and the financial community. Additional information can be found at http://www.idc.com.

IDC is a division of IDG, the world's leading IT media, research and exposition company.

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