E-Commerce Application Market Blasts Off

Revenue in the worldwide Internet commerce application market, which soared 154 percent to $444 million in 1998, will jump another 280 percent to $1.7 billion in 1999, according to International Data Corporation (IDC).

IDC’s report “Internet Commerce Software Applications Market Review and Forecast” found that Netscape, with a 9.5 percent share of the market, owns the largest share of Internet commerce application revenues. In 1998, Netscape offered its customers an assortment of Internet commerce applications to help them incorporate such features as Internet shopping catalogs, electronic procurement, and bill presentment into their Web sites, the report found.

“Netscape has done it better, faster, and earlier than anybody else in the market and is likely to remain one of the leading vendors in the coming year,” said IDC’s Albert Pang.

For the immediate future, IDC believes the US will present vendors with the largest opportunity as many companies scramble to develop an e-commerce site. With in a year or two, IDC predicts international sales will pick up as more multinational firms offer their services through the Internet. Europe, in particular, is a market to watch.

“As companies try to improve their efficiency and competitiveness within the European Union, they will be more likely to start using Internet software to participate in e-commerce,” Pang said.

IDC’s report splits market into three segments: Internet commerce sales and marketing applications; Internet commerce procurement and order management applications; and Internet commerce customer service and support applications. Procurement and order management applications will consistently provide the biggest opportunities for vendors, according to IDC. By 2003, this segment will account for $8.5 billion of the market’s overall $13.1 billion.

“A big factor behind the steep growth in the worldwide Internet commerce application market is the increased availability of these products over the past year,” Pang said. “At the inception of e-commerce, sites had to rely on their own development teams just to build a simple shopping cart or add fraud protection and export control features to their transaction engines. Now they can buy products to add these functions.”

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