|
|
| GartnerGroup Reports That an E-Commerce Web Site Costs $1 Million to Build |
| Average Cost Is Expected to Rise 25 Percent Annually Through the Second Quarter of 2001 |
| Stamford, Conn. -- May 27, 1999 -- GartnerGroup announced today that the average cost of developing and launching an enterprise Web E-commerce site is $1 million. That cost will increase by 25 percent annually during the next two years, according to a new research study. The report, "Survey Results: The Real Cost of E-Commerce Sites," also claims that 79 percent of the total cost is labor-related. |
| Survey participants discovered that everything -- from time and money to the hiring of professional service firms -- was more involved than expected. While some survey participants spent less than $350,000 on their Web sites, others spent more than $2 million. Regardless of cost, no survey participants claimed to be "on budget" for their projects. |
| According to the report, the average time to complete an E-commerce site was five months, although some took up to a year to launch. The goal for some enterprises was to create a Web E-commerce presence quickly and inexpensively, while others built Web sites that create market differentiation. Survey participants included 20 midsize to large corporations that were launching a first-phase E-commerce Web site focused on selling goods or services through either business-to-business or business-to-consumer channels. |
| Perhaps the biggest surprise to survey participants was that they did not get "almost everything they needed" from their E-commerce application vendor. On average, most corporations used two or more external firms, usually including a nationally recognized media firm as well as local systems integrators to help control costs. According to the report, "a great deal of effort was needed to build the front and back ends of the E-commerce sites," which resulted in various delays and additional costs. |
| Not surprisingly, 79 percent of the cost was labor-related while 10 percent was spent on software and 11 percent on hardware. |
| "Building an E-commerce site is a definite requirement for any midsize to large enterprise that intends to remain competitive during the next two to five years," said Roy Satterthwaite, GartnerGroup research director. "One of the challenges, however, is that today's state-of-the-art E-commerce site will become outdated in just a few months if the back-end connections and interactive applications do not keep pace with the new technologies that are being developed." |
The report also identifies three cost categories that will emerge based on function. These include:
|
| About GartnerGroup |
| As the world's leading authority on IT, GartnerGroup provides clients with a wide range of products and services in the areas of IT advisory services, measurement, research, decision support, analysis, and consulting. Founded in 1979, with headquarters in Stamford, Conn., GartnerGroup is at the center of a global community serving Fortune 1000 companies from 80 locations worldwide. |
| FOR IMMEDIATE RELEASE CONTACT: |
|
Jean Tom GartnerGroup 203-316-3272 jean.tom@gartner.com |
