Less than a year after Amazon shook up things in the business-to-business supply chain, here comes Google. The search giant has launched a beta version of Google Shopping for Suppliers, which right now is focused on the electrical and electronics industries.
Amazon Supply, which serves a host of different industries, now features more than 600,000 parts in areas such as industrial and test equipment. As Bolaji Ojo put it in a post last year when that venue was unveiled:
If you supply products to the electronics industry, the archrival you should be concerned about may no longer be the company you've competed against for decades. It's Amazon.
Why do we care that Google, which rarely treads softly, has also entered the fray? Forrester Research estimates the B2B e-commerce market at nearly $560 billion. By comparison, the worldwide semiconductor industry is worth nearly $300 billion, of which distribution accounts for about $75 billion, and a fraction of that rolls through e-commerce.
Google's approach is typically easy to use. When you're on Google Shopping for Suppliers, you can punch in a search for, say, “FPGA.” It returns a range of results, most not specifically about programmable logic devices but involving packages, DSPs, and other components that work with or in FPGA environments. Google-certified suppliers show up at the top in the paid results slot. In this case, that means US Digital (featuring a microstepping motor driver). Google has certified suppliers in the United States, China, and Germany.
The results are raw right now, but you should remember that this is beta. You can see where this story is headed.
Now, understand that the Google model — a search-centric one connecting searchers and sellers — is different from Amazon's (buy parts through Amazon). But Google's entry into the B2B e-commerce space is another disruptive milepost.
I know distribution executives are of two minds. Some sleep fitfully thinking about the Amazon/Google potential for encroachment. Others sleep like babies, knowing Amazon and Google would have to radically change their models to go head to head with electronics distributors. That said, there's near-term leverage potential for suppliers negotiating with distributors. In an EBN reader poll last year, more than 41 percent of respondents said they would buy or had already bought parts through the Amazon service. The interest is keen.
So, you're a semiconductor supplier. Are you hot to trot for this? Hot to cut out the distribution middle man? If you're in procurement, do you see the rise of Amazon and Google services such as these as a powerful potential cost saver?
What are your thoughts?