Marrakech - a source of hosted bazaars
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Marrakech is one of the few e-marketplaces considered to be on the right track by industry analysts. But now the market is moving into phase two and the company needs to sign up clients even more quickly, say analysts.
The e-marketplace sector has been no place for the faint-hearted. Many well-funded projects, including Zoho, MetalSpectrum and Chemdex, have collapsed amid weak demand.
But not all suppliers are suffering. Marrakech of Ireland is among a group of companies hoping to survive long enough to see the rewards that many analysts believe will come eventually. Market researcher IDC, for example, says that business-to-business (B2B) transactions will be worth some EU3 trillion by 2005 in Europe alone.
Marrakech's robust performance was underlined by the completion of a recent funding round. It secured a EU10 million in July 2002 - cash that will help it tout its hosted procurement, sourcing and B2B integration services to a wider
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CEO Kelly Murphy says the reason for Marrakech's continued survival is its focus on building a hosted data exchange infrastructure, instead of providing collaborative applications and services such as auctions. The benefits of online auctions are often misrepresented, according to Murphy. The main cost savings come from the "three months of pre-sourcing work" needed to qualify suppliers, not the online bidding process itself, he says.
Instead, says Murphy, businesses want to trade online with their partners without having to spend millions on building their own web-based hub. For this reason, Marrakech focused on facilitating the transaction of invoices, requisition notices and receipts by providing a hosted 'utility', as opposed to installing applications at each customer's premises.
This hosted application approach is endorsed by many analysts, who say that hosted services aid low-cost adoption by the smallest suppliers.
Marrakech's client base reflects this. The company may have 'only' 15 direct customers, yet they have brought with them a total of 400 partners who also access the exchange.
All this does not mean to say that things will necessarily be plain sailing. Companies such as Biomni, Burns E-Commerce, Elcom and GXS provide similar hosted services. And AMR Research analyst Beth Barling is concerned that Marrakech lacks a discernable industry focus and has a too Irish-centric customer base. The company will need to broaden its focus if it is to prosper in the next stage of e-marketplace development, she says.
