Business-to-business stocks may be tanking, but don't tell that to the infrastructure companies and industry watchers speaking Tuesday at the Line56 business-to-business conference here. They insist there is still a lot of life left in the business-to-business industry.
Speakers agreed that there are rewards ahead for companies that supply the software and hardware infrastructure on which business-to-business customers are building their commerce solutions.
Several participants talked up "next-wave bets," companies that provide services such as logistics, billing and customer relationship management tools.
Speakers also liked the potential for so-called private exchanges, or smaller, secured e-marketplaces designed to connect a finite set of trading partners.
"We do see the seeds of an important B2B recovery," said Chris Vroom, managing director of Credit Suisse First Boston Technology Group's business-to-business equity research.
Vroom said he expected this recovery to occur once the market stabilized.
Few people at the two and a half day conference were making the kind of grandiose predictions for business-to-business that were commonplace just months ago.
In recent months, the carnage in business-to-business stocks has been vicious.
Ariba, which has held up better than its peers, is trading around $66 a share, down from a high of $183. Commerce One is trading at $35, down from a high of $165; FreeMarkets is near $25, down from $370; PurchasePro is hovering around $18, down from $87; and VerticalNet is just below $7, down from $148.
The bloom is off the rose
Vroom noted that business-to-business rose to become the hottest industry in the tech market in the second half of 1999. In that year, at least 17 business-to-business companies went public. Now, at the end of 2000, the bloom is off the rose.
Industry watchers like Ben Smith, vice president of EDS/A.T. Kearney Ventures, made what would have been considered a sacrilegious statement just months ago.
"Not all (business-to-business) opportunities can be effectively financed with venture equity," Smith said at the conference.
While Smith said what he termed "multi-enterprise software" companies--or those providing the building blocks for business-to-business commerce platforms--were still ripe for venture funding, old-line enterprise software companies, consortia and corporations looking to launch "e-projects" in the business-to-business space were not.
Ariba chief executive Keith Krach said during his morning keynote that he considered the roller coaster-like market "scary fun."
"The last 12 months have been quite a ride. It's taken a lot of courage," said Krach, who heads what has been one of the highest business-to-business fliers in the past year.
Krach, like a number of other speakers, emphasized the need for business-to-business suppliers and customers to get back to basics. He said the business-to-business players that will be able to withstand the market slide are those that realize the industry is all about helping customers cut costs and retaining and attracting customers.
"The press-release wars are over. It's all about execution," Krach said.
Line56's New York conference is the first U.S.-based event sponsored by B2B E-Commerce International, the publishers of Line56 magazine.
Staff writer Larry Dignan contributed to this report.