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E-Commerce Software Market To Hit $2.8 Billion By 2002

Analysts at research company Datamonitor plc predict that companies will have spent $2.8 billion on e-commerce software by the end of 2002.

In a new report entitled "Global E-Commerce Software Markets," Datamonitor says that 78 percent of e-commerce software revenues will be coming from business-to-business solutions by that time. However, growth in business-to-business e-commerce will hinge on the formation of trading communities.

"If external business processes are to be automated, relationships with business partners will be vital," said Datamonitor analyst Jonathan Tikochinsky.

"Companies will only invest if there are enough other enterprises investing, otherwise the technology will be of no use. This brings a need for 'trading communities'. These trading communities link businesses together so they can inter-operate and make e-commerce a reality."

According to Datamonitor, the Internet has brought the benefits of e-commerce to the small and medium enterprise via the shared public network. Other analysts have disputed this recently, pointing out that the large corporations, especially in the UK, are far ahead of smaller companies in implementing e-commerce.

Datamonitor's report confirms that the larger companies which formerly used EDI (Electronic Data Interchange) have developed trading communities in advance of their smaller competitors.

"For the market to succeed," says the report, "a critical mass of enterprises implementing solutions will need to be developed making the marginal cost of investment for the next enterprise more efficient, and broader adoption more likely."

Datamonitor, itself one of the fastest-growing companies in Europe, has head offices in New York, London and Hong Kong.