ONLINE COMPUTING SERVICES

Market for Small Business Website Services will grow to more than #100M in 2000

SCOTTSDALE, Ariz., March 5, 2001 - Providing small companies with easy-to-use Website services is proving to be quite an opportunity for specialized providers, according to Cahners In-Stat Group (http://www.instat.com), a high-tech market research firm. Having evolved dramatically over the last two years, eBusiness Service Providers (eBSPs) continue to make advancements in their services platforms and channel structure, leading to consistent growth in revenues. In-Stat estimates vendor revenues in this segment to have reached more than $100 million in 2000. By 2004, these specialized vendors are expected to earn more than $600 million. Given this expected growth, In-Stat sees 2001 as a key year in execution and merchant acquisition for eBSPs, and as a result, providers with effective channel strategies are likely to dominate in the long-term.

"The market for Web-enabling services in the small business market has grown quickly over the last 18 months. More than 800 thousand small companies have built a web presence using an eBusiness Service Provider. By the end of 2001, In-Stat expects more than 3 million small companies to move online through an eBSP," says Kneko Burney, Director of In-Stat's eBusiness and Infrastructure Service. "The challenge for providers in this market will be acquiring serious, paying customers quickly and cost effectively, as well as continually provisioning new, useful and relevant services to these customers as they evolve online." Ms. Burney explains that building tightly integrated distribution relationships with larger firms having established relationships with small companies is already showing great promise.

The competitive landscape in this market quickly evolved in 2000, as players began to implement vastly different strategies to acquire and keep customers in the long-term. A clear shift between firms that sell their services direct and those that choose to use two-tier distribution, where they enable others to sell eBusiness services directly to small businesses, emerged. As a result, a new sub-category of providers: Infrastructure Services is gaining traction and changing the dynamics in the small business eBusiness services market.

In-Stat's small business eBSP rankings present the following:

• Given this shift, In-Stat's rankings have been segmented to reflect this evolutionary step. There are now three key categories of providers: 1. User-defined, 2. Consultative and 3. Infrastructure Services.
• The top companies in these categories are: Vista.com (#1 User-defined), eCompany.net (#1 Consultative) and Amazia.com (#1 Infrastructure Services).
• By 2004, In-Stat estimates revenues for specialized eBusiness Services will reach more than $600 million.

The report, "Annual eBusiness Service Provider Rankings: Small Business - 2000 The Year in Review" (#OC0101CS) provides a year-in-review look at the budding eBusiness services market targeting smaller customers. This research ranks key competitors across three categories, provides vendor revenue estimates for the year 2000 and offers detailed 5-year forecasts of revenue opportunities by business activity (advertising, domain registration, merchant fees, etc.).

To purchase this report or for more information, please contact Chris Kissel at 480.609.4531; ckissel@instat.com. The report price is $3,995 USD.

Cahners In-Stat Group (http://www.instat.com) covers the full spectrum of digital communications research from vendor to end-user, providing the analysis and perspective that allows technology vendors and service providers worldwide to make more informed business decisions.

For more information, contact:

Kneko Burney, Director, eBusiness Infrastructure & Services
Phone: 480.609.4544
Email: kburney@instat.com

Kirsten Skedd, Marketing Manager
Phone: 480.609.4534
Email: kskedd@instat.com