On your mark, get set, go: IDC says the race to provide e-marketplace services has begun

What began as a slow crawl to enter the e-marketplace services industry in 1999 has turned into a flat-out sprint this year. According to IDC, service providers from all walks of life including systems integrators, management consultants, Internet service firms, and pure-play e-marketplace services firms are racing to the finish line to be among the first to provide these services.

"The increased speed of movement on the part of service firms is directly related to the amount of opportunity within the e-marketplace services industry," said Dr. Leo Lipis, senior analyst for IDC`s e-Marketplace Services research program. "The development, deployment, and management of e-marketplaces represent a fast-growing opportunity, and all types of services providers are expanding and aligning their offerings to be better positioned to meet the needs of e-marketplace clients."

According to IDC, the consulting and implementation provided to deploy the e-marketplace represent only a small piece of an enormous opportunity. "Not only does an e-marketplace need to be integrated with numerous participants, but those participants need to have the front-end e-marketplace integrated with their own back-end systems," Lipis said. "For the service firm, this represents an opportunity to derive ongoing revenue from one initial contract."

Types of services needed by e-marketplace clients include support services, business strategy, marketing and branding, user interface design, research, and development, application development and integration, network development and integration, and site operations and management. As in the Internet services market as a whole, em-arketplace service firms are working hard to meet the needs of start-ups. Some are accepting equity as a payment, and others are providing incubator services.

According to IDC, the service providers who win the race and are among the first to build and operate e-marketplaces will be adorned with lucrative awards. "Being an early leader in building and operating e-marketplaces will provide competitive advantage in acquiring subsequent business. When we spoke with vendors, they said experience was one of their top three criteria when choosing an external service provider to help develop their e-marketplace," said Pooneh Fooladi, an analyst with IDC`s e-Marketplace Services research program. "The service firms that build and operate the e-marketplaces will have the advantage in providing integration services to them and their participants."