B2B models

(a) Describe and discuss the three most common business-to-business internet models according to Roberts with reference to characteristics, served market and market orientation.
(b) Discuss current evolution and possible future developments for an application service provider business model.

The most common business to business models are as follows:
Marketplace Model
Infomediary Model
Application Service provider model


MODEL




CHARACTERISTICS


SERVED MARKET

MARKET ORIENTATION

Marketplace/Exchange



A place where buyers and sellers meet to effect transactions


Can serve either horizontal or vertical markets. Usually specializes in one or the other based on expertise or relationships.


Generally oriented to the buy side.




Infomediary

Meets specialized information needs of internet businesses and consumers.

Can serve either horizontal or vertical markets. Usually specializes in one or the other based on expertise and technological requirements.

Can serve either horizontal or vertical markets. Usually specializes in specific software application.



As an intermediary, can serve either buy or sell side, or possibly both depending on the nature of the information product.



Application Service provider/ Managed Service provider.



Provides software on a contract or fee-for service basis. Frequently provides other services like Web hosting.



As a provider of enterprise level services can serve either buyers or sellers.

Marketplace Model:

There are three types of marketplaces – public, private and industry owned.
Public marketplaces serve any qualified purchaser or supplier. marketplaces had a simple business model: to capture a share of business-to-business transactions in a defined market, charge fees for connecting buyers to sellers, and wait for the money to roll in.

Private exchanges serve only a single firm. Throughout 2002 Pepsi Bottling Group, Volkwagon AG etc opened their own private marketplaces. Volkswagon’s goals are to conduct private negotiations with key suppliers and to find ways to align parts shipments with factory demand.

Industry exchanges often called consortia, serve several competitor firms in a given industry. Convisint founded in 2000 by GM and Daimler Chrysler and later joined by Renault, Nissan and Peugeot. Its goal was to handle a single marketplace that would nhandle $300 billion a year in annual procurement.



ISPs at the lowest level simply provide access to internet. Large ISPs like AOL have added multitude of services including e-commerce to their sites to make it one stop shopping. Hosts who appeal to small business market typically offer these services at a low level, such as templates for web design and simple data aggregation and reporting. Hosts who have an appleal to large corporations offer the same set of services at a higher level. They are likely to have sophisticated consulting services skilled web and data base programmers, realtime on demand site performance reporting and high quality technical support.


Application Service Providers are third party entities that manage and distribute software based services and solutions to customers across a wide area network from a central data center. ASPs rent softwares to clients on a usage fee basis. They normally specialize to particular e-commerce and large business applications.

Eg: Chillicom.com, OBT.com.au

User count is important because of the typical ASP revenue model Fees are pegged to the number of registered users at each client site in much the same way as software vendors charge for site licenses. As ASPs also look for multiple revenue sources and away from sole reliance on a user-based fee structure a new variant is emerging the managed service provider.MSPs handle issues ranging fomr security to identifying the appropriate software application or systems integrator by partnering with wide range of specialized providers.

MSP eg.. Kaseya.com
Although MSPs can provide software applications, they donot see themselves as competitive with preexisting ASPs but instead as providing infrastructure services that permit ASPs to concentrate on serving their customers. Many early customers of MSPs have actually been ASPs.

The MSP market has evolved and expanded significantly over the past decade. Although network and IT infrastructures are more business critical than ever, factors such as complexity of technologies increase in internal support costs and necessity toi focus on core business are forcing enterprises to outsource more and more of their infrastructure management. The scale, performance and efficiency that are necessary to succeed in this market can be achieved only through infrastructure management solutions that are comprehensive, seamless and proven.