December 20/27, 1999

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Service Providers Aim For Standard
Members of Internet business services initiative promote flexible offerings for less money

By Aisha M. Williams

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nternet business-service providers formed an alliance last week to ensure interoperability of their technologies and promote their offerings collectively to small and midsize businesses.

Members of the alliance, the Internet Business Services Initiative, say they'll identify standard technologies for their services, such as the Extensible Markup Language. Vendors calling themselves Internet business-service providers typically offer services such as customer-relationship management, procurement, and business-to-business transactions that users access through vendors' Web sites. Members are Agillion, BizFinity, Biztone.com, Eality, Employease, NetLedger, On the Go Software, TimeBills.com, USAnet, Virtual Growth, and Works.com.

By developing generic applications for a "one-to-many" distribution model on the Web, Internet business-service providers can achieve economies of scale and keep prices low for companies with limited IT budgets. Other types of outsourcing vendors that use the Internet--typically identified as Web-hosted service providers or application service providers--may offer more-customized applications and services, but are often more expensive and require businesses to have minimal in-house IT expertise to set up the services, say analysts.

A report from Hambrecht & Quist says the market for Internet business services will grow to $6.6 billion by 2003. Analysts expect the outsourcing model to appeal to companies that value simplicity and flexibility. "Internet business services are very accessible and don't rely on packaged software, so new features can be added daily," says Hurwitz Group analyst Fern Halper.

In addition, the Internet Business Services Initiative has started discussions with IBM and Merrill Lynch & Co. about bundled service offerings. "We see the emergence of a market of finance companies, transportation companies, and others bundling service packages to supply to their own customer base," says Frank Moss, founder and chairman of Agillion.

Online real-estate company iProperty.com has tapped Agillion to provide CRM services for its customers, and is considering offerings by other members of the group, says iProperty.com CEO Doug Dayhoff, whose company provides technology to create customized, secure extranets for real-estate agents and home buyers. Agillion will also provide iProperty.com with automated document delivery and tracking capabilities.

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