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E-business in Power Generation: OEMs and Utilities Persisting with Marketplace StrategyPublished: Thursday, 1 November
2001
by Harald Thaler Our previous article of last week showed that independent marketplaces in the power generation sector have had a rocky ride over the past few months or so. In this second piece on e-business marketplaces in the power sector we look at developments among marketplaces that have the backing of specific industry partners. A key player is Germany-based ec4ec.com which, unlike its independent rival SourcingParts, was established by power generation OEMs. The marketplace was awarded the Frost & Sullivan Market Engineering Award for E-Business Innovation in April 2001. Since then ec4ec.com, which is a joint venture between Babcock Borsig, VA Tech, mg technologies, SAP and Deutsche Bank, has made good progress in connecting suppliers and expanding the functionality of its platform. The company will hold roadshows in seven German cities during November 2001 to familiarise its target audience with the potential benefits of collaborative engineering and e-procurement. Overview of Key Industry and OEM-Driven Marketplaces in the Power Generation Sector, 2001
The collaborative engineering and procurement marketplace has even been on the acquisition trail and acquired the shipbuilding marketplace shippurch.com in July 2001. Babcock Borsig, the leading founder of ec4ec.com, is itself a leader among power OEMs in the adoption of e-business. A dedicated e-business subsidiary, Babcock eBusiness Solutions, was established in June 2001 in order to provide e-business solutions to other companies, in particular SMEs in Germany. Utilities also getting in on the act The energy industry itself has also put its weight behind a number of e-business initiatives. The Achilles Online Exchange was the first to achieve operational status in Europe. Since starting up in June 2000, the exchange has processed transactions with a total estimated value of Euro25 million. There are now over fifty suppliers in the process of having online catalogues generated and it is anticipated that this number will rise to between 300 and 400 by 2002. The Achilles exchange has shown considerable staying power, not least as a result of the backing of 14 large UK electric, gas and water utilities.
It remains doubtful whether the auctioning of critical power plant components, such as turbines, can be successful, at least if judging by a recent US example. Enporion, a marketplace serving the purchasing needs of small to medium-sized utilities, primarily in the Midwest to Mid-Atlantic regions, recently launched an auction for 20 used gas turbines. However, even after the initial pre-registration of 14 potential purchasers, the actual auction in September 2001 did not produce a single bid. This disappointing result reflects the fact that many utilities and power generation still E-business remains crucial Despite the difficult market situation facing many e-business initiatives, it is clear that the leading players are pressing on with the introduction of e-business into their respective organisations and the adoption of collaborative solutions. It is crucial for power generation companies to persist with their e-business initiatives as those who take an early lead will benefit most once the global economy recovers. Putting e-business plans on hold now would mean that such OEMs and turnkey contractors would be at a serious competitive disadvantage to their leaner internet-enabled peers. Frost & Sullivan conducts ongoing research into e-business in the European power generation equipment sector and has published a strategic report on e-business strategies in this field, the details of which are located here. See our related article on Independent Marketplaces - Life After the Bubble Burst
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