The Boston Consulting Group (BCG) writes ... "Electronic marketplaces for the exchange of industrial goods and services have spread to industries across the economy, and it is increasingly clear that these marketplaces will create enormous value. The vast majority of them, however, will capture little of the value they create. Instead, the lion's share will go to the buyers and sellers that conduct transactions through e-marketplaces, using them to lower costs, reduce cycle times and total cost in use and improve asset utilization. "In order to survive the emerging shakeout, e-marketplaces will need a deep understanding of the economics of their business, as well as of the likely evolution over time. They must also develop strategies for building competitive advantage as early as possible in what is likely to be a very tough market." (From the Boston Consulting Group Report "The Business-to-Business Opportunity: Creating Advantage Through E-marketplaces," October 2000. Contact imc-perspectives@bcg.com) According to BCG, e-marketplace revenues will be modest and many upstarts will not be able to build strong businesses. So . . .

HOSPITALS BEWARE.

For hospitals evaluating exchanges or dot coms offering services to apply the internet to materials management, the challenge is to pick the right one. Hospitals might consider Ormed. For starters because they support this journal and care enough to see that the evidence of best practices gets out to the health care providers across the country. And so this opinion is blatantly biased. But also because Microsoft backs them. Mr. Gates and his generals have a reputation for picking winners and sticking with them. MediSolution has benefited from this strategy and now Ormed gets to bask in the Seattle glow as well - especially for their new product, the Ormed Medical Exchange. (Source: B. Alexander, Microsoft's General Manager in British Columbia and Dean Bedwell of Microsoft Ontario) And because they appear to meet the Boston Consulting Group's criteria and understand the economics of healthcare - it is their core market. Lastly they have caught the attention of some major customers in Canada and the United States. Maybe, this makes them a little safer bet than the upstarts. You be the judge.

(Note to readers. We are inviting the global powers behind the Internet to recommend dot coms you should consider when looking for help. The next Hospital Quarterly will feature notes provided by Sharon Baker from Oracle. Look for comments from Cisco, Compaq, Agilent and others. CIO's of healthcare organizations who are willing to share some of their ideas are invited to contact dotcoms@longwoods.com)