1. © 2001 Jupiter MMXI Jupiter Visions and Trends of Tomorrow’s B2B James MacAonghus Analyst, Jupiter MMXI

2. © 2001 Jupiter MMXI Jupiter Agenda Sell Cost Savings and You’ve Missed the PointSell Cost Savings and You’ve Missed the Point Replace Custom Build With Packaged SoftwareReplace Custom Build With Packaged Software Where Now For Net MarketsWhere Now For Net Markets

3. © 2001 Jupiter MMXI Jupiter Sell Cost Savings and You’ve Missed the Point

4. © 2001 Jupiter MMXI Jupiter Integration Requirements Will Drive Infrastructure Investment … Source: Jupiter Net Market Infrastructure Forecast (11/00) (in billions) Page 3 of 18

5. © 2001 Jupiter MMXI Jupiter … But Still Early Stages of Marketplace Development Source: Jupiter Research Adolescence Infancy Ambitious Climber Teens Young Adult Maturity Basic Exchange Functions Expanded Content Advanced Search Collaboration SystemsIntegration Globalization Localization Multi-Market Mechanisms Transactional/ Behavioral Analyses Adjacent Market Collaboration Highly Integrated Features Net Market progress to date Remaining phases to maturity Page 4 of 18

6. © 2001 Jupiter MMXI Jupiter Sell to Early Adopters – Rest Will Follow Early Adopters Late Followers Early Followers Laggards EffectivenessCost Page 5 of 18

7. © 2001 Jupiter MMXI Jupiter Selling Cost Savings Is Self- Limiting Efficiency Effectiveness Page 6 of 18

8. © 2001 Jupiter MMXI Jupiter Value Propositions for Competitive Advantage Cycle timeCycle time Brand substantiationBrand substantiation QualityQuality CapacityCapacity Capital utilizationCapital utilization Customer satisfactionCustomer satisfaction ProductivityProductivity RegulationRegulation Page 7 of 18

9. © 2001 Jupiter MMXI Jupiter Risks, Cost, ROI Make Competitive Advantage More Attractive Source: Jupiter Research + - - + Competitive Advantage Cost Savings Current Phase of B-to-B Value Motivators 2003 Phase of B-to-B Value Motivators Page 8 of 18

10. © 2001 Jupiter MMXI Jupiter Cisco’s B-to-B Investment Roadmap Source: Jupiter Research 80% of orders done online80% of orders done online Customer satisfaction now 4.25, up from 3.4Customer satisfaction now 4.25, up from 3.4 Substantially fewer errorsSubstantially fewer errors Cycle time down from 6- 8 weeks to 1-3 weeksCycle time down from 6- 8 weeks to 1-3 weeks Lowered inventoryLowered inventory 55% of Unit Volume Shipped Without Cisco Touch55% of Unit Volume Shipped Without Cisco Touch 25 Days to 10 Days’ Reduction in Engineering Changes25 Days to 10 Days’ Reduction in Engineering Changes New Product Introductions Accelerated by 25%New Product Introductions Accelerated by 25% Customer Facing Connecting to the Supply Chain New Product Launch Page 9 of 18

11. © 2001 Jupiter MMXI Jupiter Replace Custom-Build with Packaged Software

12. © 2001 Jupiter MMXI Jupiter Custom Build v Packaged, Over Time Source: Jupiter Research + - - + Functionality Time Packaged Applications Custom Build Page 11 of 18

13. © 2001 Jupiter MMXI Jupiter Most Important Value-Added Services Depend upon the Market Being Pursued Mediation Chat and CustomerServices Buying From New Suppliers Buying From Existing Suppliers Ratings Community Inspection Guarantees Insurance Content Supply Chain Integration Security Negotiation Shipping Credit Collaboration ProductExplanation Tracking TrainingCriticalValuable Less Valuable Buyer Market Value Added Services Escrow Source: Jupiter Research Page 12 of 18

14. © 2001 Jupiter MMXI Jupiter Technologies Map to Market Mechanisms Source: Jupiter Research VendorExchangeAuction Catalog Aggregator Reverse Auction AribaXXXX BizBotsX CommerceOneXXXX IdaptaXX MoaiXX OpenSiteXX RightWorksX TradeMatrixXX VerticalNetX Page 13 of 18

15. © 2001 Jupiter MMXI Jupiter Reasons to Use Packaged Applications Despite team growth, competitive advantageDespite team growth, competitive advantage Time-to-market for new functionalityTime-to-market for new functionality Net market makers should focus elsewhereNet market makers should focus elsewhere Post-merger integrationPost-merger integration Scale and expansionScale and expansion Page 14 of 18

16. © 2001 Jupiter MMXI Jupiter Where Now For Net Markets?

17. © 2001 Jupiter MMXI Jupiter ISMs First to Define Future Value Propositions Reduce cycle times – table stakesReduce cycle times – table stakes Increased capacity and utilizationIncreased capacity and utilization Industry-wide demand/supply viewsIndustry-wide demand/supply views New financial instrumentsNew financial instruments The Network EffectThe Network Effect Page 16 of 18

18. © 2001 Jupiter MMXI Jupiter Industry Sponsored Marketplaces and Independents Technology acquisition - GHXTechnology acquisition - GHX Creation of turnkey solution - GoFishCreation of turnkey solution - GoFish Acquisition of liquidity services – e2openAcquisition of liquidity services – e2open Supply chain efficiency - MetalSiteSupply chain efficiency - MetalSite Page 17 of 18

19. © 2001 Jupiter MMXI Jupiter Where Do We Go from Here? Massive consolidation – liquidity, partnerships will determine survivalMassive consolidation – liquidity, partnerships will determine survival Value-added services move focus beyond matchmaking to completing entire life cycle of transactionValue-added services move focus beyond matchmaking to completing entire life cycle of transaction Don’t ignore local and SME marketsDon’t ignore local and SME markets Private trading networks emergePrivate trading networks emerge Page 18 of 18

20. © 2001 Jupiter MMXI Jupiter Thank you jamesm@jup.com

21. © 2001 Jupiter MMXI Jupiter Custom Build Way More Common Than Package Software Fig 5: What technology solution(s) did you use to create your Net Market?

22. © 2001 Jupiter MMXI Jupiter Transactions Within Standalone Marketplaces Will Shift to Inter- and Intra-Marketplace Transactions Are you linked or do you plan to link to other net markets? Percentage of Markets Linked Today Percentage of Markets Linked in Future Source: Jupiter Executive Survey (10/00); n=90, (US only)