General Electric Company (NYSE:GE), which is already established as a major online player, has launched an electronic commerce division to tap into the burgeoning business-to-business (B2B) market. GE Information Services has been considered a major competitor for IBM in the area of trading systems between companies that order, ship and track supplies and products.
This next step in GE’s online evolution will facilitate data exchange, purchasing software and services, as well as trading partner exchanges over the Internet.
GE Global Exchange’s technology will be integrated with vertical industry expertise to create e-commerce systems for various types of businesses. “This is not a startup,” said Harvey Seegers, who will helm the new Internet division. “We come to the market with a good 30 years already, with a trading partner community of 100,000.”
GE To Enable Small Businesses To Go Online
For small and medium-sized businesses, GE’s new venture may be the key to finally establishing an online presence. “The Internet is key to enabling millions of small and medium-sized businesses currently without e-commerce capabilities to join our global trading community,” Seegers said.
Implicit in GE’s new venture is the company’s aim to strongly compete with such B2B players as Commerce One, Inc. or Ariba, which are already enabling companies to automate the buying and selling of goods and services on the Internet. Ultimately, the unit may also offer auction services.
GE’s establishment of GE Global Exchange Services comes at a time when shell-shocked investors discouraged by the lackluster performance of online retailers are turning their attention to business-to-business electronic commerce. For businesses such as GE, the trading community concept has a number of advantages, not the least of which is little or no governmental intervention.
So far, the U.S. government has taken a hands-off approach to the communities, opting to let Internet commerce evolve. This situation could change in the near future, as bigger and bigger operations emerge. The Federal Trade Commission (FTC) has already begun observing some major B2B developments.
FTC Keeping an Eye on New Alliances
The recently announced initiative among GM, Ford and Daimler-Chrysler, as well as the Sears, Oracle and Carrefour alliance has caught the attention of the Federal Trade Commission.
Reportedly, the FTC is taking a serious look at online trading communities, particularly in the areas of fair competition and consumer privacy issues. If business-to-business e-commerce lives up to the Forrester Research prediction of $1.3 trillion (US$) by 2003, chances are the government may show even more interest in the operations, particularly to safeguard against monopolies and potential violations of antitrust laws.