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Report: $3.8 Billion U.S. Market for E-Commerce Software by 2002

Forrester Research Inc. launched a new Commerce Technology Strategies service, and its first report predicts a $3.8 billion U.S. market for electronic commerce software by 2002.

The new service will focus on the technologies that enable online commerce, helping companies make wise technology decisions that create a competitive advantage, the company said.

Future research topics include Internet commerce architectures, development tools and applications, integration with legacy applications, and transactive content.

Said George F. Colony, president of Forrester Research in Cambridge, MA: "Commerce Technology Strategies rounds out Forrester's Internet commerce offerings. As companies prepare to launch their initiatives, Commerce Technology Strategies will provide a lens into the enabling technologies that will ultimately affect their transition into the Internet economy."

In the service's first Report, "Sizing Commerce Software," Forrester predicts that the commerce software market in the United States will grow from $121 million in revenues in 1997 to $3.8 billion by 2002. Taking Europe and Asia into account, worldwide revenues for commerce software are expected to reach $4.9 billion by 2002.

This growth will be driven by vast numbers of businesses going online, increased demand for Web-based services from businesses and consumers, and a preference for packaged commerce solutions among buyers, the report said.

"The next two years will produce dramatic growth in the commerce software market as businesses get serious about buying, selling, and trading online," said Stan Dolberg, director of Commerce Technology Strategies and author of the Report.

Within the commerce software market, Forrester said it sees three trends emerging: Sell-side systems and tools will dominate the market as companies build catalogs and auction networks with Transactive Content; customer service applications will emerge as another important segment, delivering enhanced self-service, order confirmation and tracking, and proactive communication with consumers; and buy-side software will be gradually adopted by large firms and business units seeking to streamline purchasing.

As the installed base of commerce software expands, Forrester believes that a few key industries will achieve critical mass, giving rise to an Internet commerce power grid that supports dynamic trading processes. In this environment, catalogs, offers, orders and digital goods will flow smoothly between buyers, sellers, and intermediaries, driving markets to new levels of efficiency. As these Internet commerce power grids proliferate and interconnect, the entire business environment will ultimately be reshaped.

Commerce Technology Strategies' first report, "Sizing Commerce Software," will be available free online for a limited time at Forrester's Web site.