What a difference a year makes. Just 12 months ago, a great number of e-commerce exchanges were springing up and attracting millions of dollars in funding. Unfortunately, most have not lived up to their expectations.

"Very few have achieved the kind of liquidity and cost savings envisioned in the original business models," says Murray Mitchell, vice president of Buy and Supply Services, IBM. Murray spoke at Link 2001, an IBM sponsored e-business conference.

At one time, an estimated 10,000 exchanges were expected to operate. Most experts now say fewer than 1,500 can be viable. A number of mergers and acquisitions are occurring among smaller exchanges while others are focusing on functions that customers desire, like supply chain visibility.

The adoption of public exchanges has been slower than expected because key companies chose not to turn over supply chain data to potential competitors. Murray predicts these companies will shift toward the use of private exchange networks. He says the big benefit to future ex-changes will be collaboration.

Murray believes the use of exchanges will become a standard way of doing business, as more learn their markets, understand their customers, and become more flexible.