- 1 - The New, New B2B Hub Sandy McGuffog, Jun 2000 © 2001 Sixhills Consulting Ltd & Author The New, New B2B Hub As short a time as six months ago, conventional wisdom within the e-commerce community was that the business model for B2B hubs was well understood – value would go to whoever owned the “on-ramps” to the digital economy, and the on-ramps of the B2B world would be hubs. And the stock market valuations of most of the players in the industry reflected this. However, the last six months however have shown that perhaps the business model wasn’t actually all that well understood. As might be expected, B2B stocks as a group suffered in the downturn of March and April just as much as other e-commerce stocks. But looking in more detail at the results shows that something else has also happened: the market seems to have changed how it values B2B business models. The belief that value would go to whoever owned the on-ramps hasn’t changed, but the markets’ belief as to where and what those on-ramps will be have changed. By way of example, exhibit 1 (following page) shows the relative stock prices of three leading B2B players with distinctly different business models. Ariba and Commerce One both began life as e-procurement system providers, and are now rapidly moving into the B2B hub arena although with different business models. Ariba is on record as “just wanting to be a switch”, while Commerce one has a more hub-centric approach with single regional hubs containing various on-line markets. VerticalNet on the other hand is probably the best proxy for a “pure-play” centralized B2B hub creator.  Exhibit 1. Relative share price performance What’s significant here is the relative strength pre- and post-correction, with VerticalNet the strongest pre-correction, followed by Commerce One, and with Ariba trailing behind. Post-correction however, this exactly reverses, with Ariba the strongest and VerticalNet’s performance the weakest. 0%100%200%300%400%500%600%700%800%900%Sep-99Nov-99Dec-99Feb-00Apr-00May-00Jul-00Sep-00Relative Share PriceDateAribaVerticalNet
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