Corp. Web Spend To Double

<B> Corp. Web Spend To Double</B>

By Mary Ann McNulty

Corporate Internet spending is expected to more than double by 2002, from $85 billion this year to $203 billion, according to "Internet Futures Spending Model 1997-2002: Business Gears Up for E-Commerce," a new report by International Data Corp., Framingham, Mass. Financial services will spend $16.6 billion on e-commerce this year, manufacturing will spend $24 billion, and media and communications will dole out $10.7 billion.

"Corporate Internet spending is being driven by the ongoing quest to sustain competitive advantage. Corporations need to be innovative, efficient and ultimately profitable in order to remain competitive, and Internet technologies enable businesses to do so," said Anna Giraldo, senior analyst in IDC's Internet and eCommerce Strategies Group. The past few years have been a testing ground for Web-based products, but corporations have gained confidence in the technology and have grown accustomed to basic applications like e-mail and groupware. Now, they're investing in "Web-based technologies to maximize operational efficiencies, expand their marketing and sales efforts, improve customer service and strengthen their partnerships."

For America West, distributing on the Web is doing that and more, according to Bill Spillman, senior director of product distribution. In 1998, Spillman said, 1.5 percent of America West's revenues came from its own Web site, up from just 0.5 percent in 1997. Online bookings on all sites account for 3 percent of the company's revenues.

The cost savings of such bookings are dramatic, Spillman said. Bookings made on its own site cost just $6, while bookings made through other sites cost $12, bookings made by America West agents cost $13 and bookings made by travel agents cost $23. Online sales total eight times the volume produced by America West's own agents.

Such rosy forecasts are no doubt prompting the wave of new e-commerce applications. Litton Enterprise Solutions Inc., McLean, Va., is forming a new company, Electronic Trading Solutions, to provide intelligent e-commerce solutions to industry buying groups, associations, conglomerates and other collections of companies bound by a common structure. While ETS's first customer is an association of 75 independent truck parts distributors, a company spokesperson said the unit is "definitely targeting travel" applications.

Earlier this year, ebizmart.com opened for business as the first "business-to-business e-commerce clearinghouse portal." Owned by CPU MicroMart Inc., it is targeting original equipment manufacturers and resellers.