The world of e-Commerce has created many new terms of its own and re-defined some old and well-understood words. This glossary is provided as a navigational aid through the verbiage.




Agents: Intelligent software that can be used in an exchange or auction to monitor prices and conditions on behalf of buyer and supplier and , in some cases, to automatically execute trades.

API (application program interface): The specific method prescribed by a computer operating system, or by another application program, by which a programmer writing an application program can make requests of the operating system or another application. Unlike a GUI (graphical user interface), which is a direct user interface, the API interfaces with an operating system or a program.

ASP (Application Service Provider): An online outsourcer or hosting service for applications, letting net market makers rent instead of buying applications and services such as auctions, exchanges and catalogue aggregation

Auctions: Multiple buyers compete for goods offered by a single supplier. Prices increase over time. Auctions are suitable for goods that are hard to move e.g. capital equipment and excess inventory.


Back end systems: Legacy enterprise systems that handle order processing, inventory and receivables for buyers and suppliers

Bills of Material Function: Ability to present predefined lists of items routinely required by buyers for a specific purpose. Enables a market to combine a channel enabler approach with an exchange.

Butterfly Market: An intermediary company that facilitates B2B e-commerce. They build and own an online marketplace and occupy a central position between buyer and seller.

Buyer Centric Exchange: Enterprise e-procurement solution, an online buying consortium or an exchange that specialises in reverse auctions or demand aggregation. A buyer centric exchange is biased towards the buyer in terms of benefits derived from trade.


Catalogue aggregators: Neutral intermediaries that make sense of buying options by aggregating catalogues from multiple vendors with relatively static prices Typically function as virtual distributors but don't take possession of goods themselves.

C-commerce (collaborative commerce): Application which enables multiple enterprises to work together online within a dynamic trading community

CGI (common gateway interface): A way of interfacing computer programs with HTTP or Web servers, so that a server can offer interactive sites instead of just static text and images.

Channel Enablers: Marketplaces friendly to existing distribution channels rather than trying to create a new channel e.g. Channelpoint (market between insurance brokers and carriers).

COBAM: Consortium of brick and mortar players e.g., Covisint (automobile industry).

cXML (commerce XML): A new set of document type definitions (DTD) for the XML specification. cXML works as a metalanguage that defines necessary information about a product. It will be used to standardize the exchange of catalogue content and to define request/response processes for secure electronic transactions over the Internet. The processes includes purchase orders, change orders, acknowledgments, status updates, ship notifications, and payment transactions.


DNA: Short for Windows Distributed Internet Applications Architecture, a marketing name for a collection of Microsoft technologies that represent every aspect of Internet application development including messaging, warehousing, integration and information exchange via XML.

Dutch Auction: Also known as descending price auction it is typically used to sell a group of identical items. The seller sets a starting high price per item and the transaction engine continually lowers the price until the buyer makes an offer.


E2E (Exchange to Exchange): Exchanges from different verticals and geographic regions will form myriad new alliances and linkages fostering the next paradigm of e-commerce - Exchange to Exchange.

EDI (electronic data interchange): EDI is a global computer network, separate from the Internet, used to handle financial transactions between corporations, banks and other institutions. EDI transactions usually conform to UN/EDIFACT and ANSI X12 standards, however, there are many dialects

English Auction: An auction in which there is only one item for sale. The seller sets a minimum acceptable price and solicits continually higher bids until the close of the auction. The winning offer comprises the best combination of high price and acceptable packaging and shipping terms.

e-Procurement: Third generation procurement technology packages usually offering greater ease or use than ERP-based solutions. e-Procurement applications use the Internet and corporate intranets to automate large buying organisations' business processes with purchasing non-production goods. E-Procurement focuses on reducing costs through more efficient purchasing of indirect goods.

ERP (Enterprise Resource Planning): Complex applications used by large organisations to manage inventory and integrate business processes across multiple divisions and organisational boundaries, frequently the application backbone in many large enterprises.

Exchanges: Buyers and Sellers negotiate prices in a two-sided marketplace. Prices move up and down usually with a bid ask system. Exchanges are suitable for simple products such as commodities and perishables, plus intangible items such as electric power and telecommunications bandwidth.

Exponential market: Where one party can be both a buyer and a seller. Both buyers and sellers benefit when new participants join because fewer participants are needed to create higher volumes e.g. Altra (energy marketplace).


Firewall: A set of related programs located at a network gateway server that protect the resources of a private network from users of other networks

Forward Auction: An auction in which purchasers place competing bids on items for sale. Both the buyer and the seller must respect the final price at the end of the auction provided the highest bid placed meets or is higher than the target price indicated by the seller.


Gateway: A device that connects two computer networks that use different protocols. It translates between protocols so that computers on the connected networks can exchange data. For example, commercial online services often have gateways for sending e-mail to Internet addresses.


Horizontal market: Sell materials or services that any company needs (e.g. pens, pencils, etc.), generally not those used for manufacturing products. Services include MRO, benefits management and procurement process management.

HTML (hypertext mark-up language): The set of mark-up symbols or codes used to tell a Web browser how to display the text and graphical content of a Web page. The World Wide Web Consortium recommended HTML as a standard and it is used by the major browsers, Microsoft's Internet Explorer and Netscape Navigator.


Ignition: The point at which a market gains momentum, liquidity is achieved and the Net Market becomes a more efficient means of buying and selling than the traditional physical market or channel.

Infomediary: An intermediary that facilitates trade between buyer and seller by providing information about the materials, services and participants of an e-market.


Java: A programming language frequently used on Web sites. Some Java programs, or "applets" are downloaded from the Web server to the visitor's own computer, which then runs them. This distinguishes Java programs from other Web programming languages, such as PERL, that reside and run on the Web server (only the results are downloaded to the visitor's computer).



Lattice Vortex Network: Term coined to describe how vertical and functional markets intersect and partner.

Linear market: When products move from one end of the supply chain to the other, typical of traditional markets and manufactured goods. Adding a seller primarily benefits buyers and adding a buyer mainly benefits sellers.


Mark-up: The sequence of characters or other symbols inserted at specific places in a text or word processing file that specify the file's appearance when printed or displayed. The mark-up indicators are often called "tags" and may also describe the document's logical structure.

Metalanguage: A definition or description of a language, that is, a higher-order language that defines a computer language

Metamediary: Besides providing a multi-vendor multi-product marketplace the metamediary provides additional services for market participants. Services provided could include quality assurance, procurement management, fulfilment or payment solutions.

Meta tag: A special HTML tag that provides information about a Web page. Unlike normal HTML tags, meta tags do not affect how the page is displayed. Instead, they provide information such as who created the page, how often it is updated, what the page is about, and which keywords represent the page's content. Many search engines use this information when building their indices.

MRO (Maintenance, repair and operations): Routine purchases such as office supplies, travel services or computers needed to run a business but not central to the output. Ariba and CommerceOne sell buy side procurement software for MRO.


Netmarkets: An online intermediary that connects fragmented buyers and sellers. Netmarkets eliminate inefficiencies by aggregating offerings from many sellers or by matching buyers and sellers in an exchange or auction.

Network effect: Describes how buyers and sellers benefit when a new market participant is added. The network effect produces a cycle with more buyers attracting more sellers and vice versa.

Normalise: To create a consistent set of themes and product descriptions often using industry - specific translation software. Normalisation technology involves translating schema or structures in product databases.


Ontology: A Yahoo like relationship and a glossary used as a standardization device to describe goods and services and to facilitate commerce in a net market. (See normalise).


Perl: Perl is a general-purpose programming language invented in 1987 by Larry Wall. With over one million users worldwide, it has become the language of choice for Web development, text processing, Internet services, mail filtering, graphical programming, systems administration, and every other task requiring portable and easily developed solutions.

Private Marketplace: Characterised by one-one and one-many type transactions a private marketplace is usually operated by one or a few large enterprises and is open to the enterprises(s)' strategic trading partners along its entire supply chain.

Procurement Hub: An MRO procurement marketplace for routine purchases such as office supplies, travel services or computers needed to run a business but not central to the business' output.

Proxy Limit: The highest price a buyer is willing to pay for an item at which the application stops automatically submitting bills on his behalf for the buyer. The bids are placed using the minimum price increment set for the auction.

Public Marketplace: A public marketplace is a true open market, characterised by global participation with one-many and many-many type interactions, market driven pricing and real-time purchasing. Typically, a public marketplace is operated by a neutral third party whose primary role is to bring buyers and sellers together.

Purchasing Hub: Buyer centric mediators that aggregate demand from small buyers to negotiate better terms with large sellers. They can be horizontal (operating supplies) or vertical and are used for spot purchasing (exchange or auction) or systematic purchasing (catalogue mechanism).



RFP (Request for Proposals): Invitation to suppliers to bid on supplying products or services that are difficult to describe for a company or public agency.

RFQ (Request for Quotation): Invitation to suppliers to bid on supplying easily described products or services needed by a company or public agency.

Reverse auction: Multiple suppliers bid for a single buyer's need for a particular product or service. Prices decrease with time. Reverse auctions are suitable for raw materials, industrial parts etc. The power of the buyer is paramount to the success of reverse auctions, so they work well for large enterprises or for intermediaries which aggregate the demand of a collection of smaller buyers.


SET (secure electronic transaction): A system for encrypting e-commerce transactions, such as online credit card purchases. Developed by Visa, MasterCard, Microsoft, and several major banks, SET combines 1,024-bit encryption with digital certificates to ensure security. SET is still in development.

SSL (secure socket layer): A system for encrypting data sent over the Internet, including e-commerce transactions and passwords. With SSL, client and server computers exchange public keys, allowing them to encode and decode their communication.

Strange attractor: A key factor that causes buyers and sellers to use a Netmarket, often eliminating a transaction cost in a specific industry

Supplier Centric Exchange: Faced with commoditisation of materials supplier centric exchanges will arise that are biased towards suppliers. This e-market may resemble an enterprise storefront, an online selling consortium or an exchange that specialises in supplier initiated auctions and differentiation based on new levels of serviceability.

Supply Chain Management: Planning applications centred on providing tools for automating key business processes that occur before the product is manufactured and brought to market including product design, channel and vendor management, optimising manufacturing and logistics scheduling with multiple suppliers, and enhancing indirect sales channels.




Vickery Auction: A seller initiated auction in which multiple units constitute the lot offered for purchase with the price for the lot set equal to the successful bid for the marginal unit. Vickery auctions have been used to set prices for IPO stocks.

Viral: A self-propagating practice or pattern of Internet use that moves from person to person, e.g., Viral Marketing.

Virtual Private Marketplace: A private market to enable approved suppliers to bid on a large buyers business or to enable more cost-effective transactions on negotiated terms. For example, national transportation exchange sets VPMs for large shippers to schedule and obtain bids from approved carriers in addition to NTE's main spot market.


WAP (wireless application protocol): An open standard data transmission protocol that facilitates data transfer through wireless networks.

WML (wireless mark-up language): A mark-up language used to present the text of Web pages on mobile phones via wireless access. WML is a component of WAP.

Workflow Marketplace: Provides project tracking or collaboration services for complex, iterative, multiparty projects in constructions, syndicated bank debt or licensed trademarks. Create an information-sharing network that gives all parties an appropriate view of the project.


XML (extensible mark-up language): A metalanguage containing a set of rules for constructing other mark-up languages. With XML, people can make up their own tags, which expands the amount and kinds of information that can be provided about the data held in documents. It enables designers to create their own customized tags to provide functionality not available with HTML. For example, XML supports links that point to multiple documents, as opposed to HTML links, which can reference just one destination each.

XSL (extensible style sheet language): An important XML standard, which allows businesses to reformat XML documents to match internal standards.


Yankee Auction: A seller initiated auction in which multiple units constitute the lot offered for purchase. Differs from a Vickery Auction in that successful bidders pay the prices that they bid rather than the price of the successful bidder for the marginal unit as in a Vickery Auction. This auction may not be allowed for most commodities as it may constitute price discrimination but is a possible variant for auctions where yield management pricing is allowed.