A day is day in the life of a connected market, but what of tomorrow?

Offering a powerful EDI Network API and Operating a VAN specialized for Service Providers frightened a laggard giant witless, and that’s  how the Loren Data Corp v. GXS Inc. antitrust case ultimately came into being

EDI Industry!!! He sued for YOUR freedom to compete…….

Owning a leadership position is a serious responsibility.  For Loren Data Corp, ECGridOS and ECGrid made a torpid giant angry. We can say it was foreseeable. Capturing success in the competitive EDI sector is what it’s all about. It’s about Knowledge.

GXS has no inherent knowledge, no founder’s sweat equity – the corporate body is only an agglomeration of their acquisitions, the 3 major VANs purchased, and a dozen or so e-commerce software entities. What we know of a GXS today is an investment puzzle, which built on the cooperative interconnects of the VANs they bought. Their top management is about as removed from the ‘art of EDI and Communications’, as the Auntie you shall visit this holiday season. Don’t believe me? Check out http://Glassdoor.com, and you will see reviews of GXS by dozens of well placed employees that bear out the rot I am referring to.

For the many skilled integration teams folded or hired later by GXS,  I am not besmirching your professional skills; I am conducting, via a series of expository posts, a top down analysis of why GXS is acting so contrary to such proven, honorable conduct that has built connected marketplaces  – and indeed built the interconnected VAN industry.

In denying to Loren Data Corp  peer message traffic exchange terms (non-settlement) that GXS grants reciprocally with all other VANs at scale, , translates as, “we have no vision, we are bereft of innovation, and all we truly own is a choke point, the amalgam of interconnects we consolidated from our acquisitions…..in other words, our pathway to TGMS is our only asset”

Therefore all take note of a truly Investment Grade company at the peak of vision and productivity. It’s not GXS, silly – it is Loren Data Corp.

It’s Loren Data Corp!  Bootstrapped by one owner, a peerless working portfolio of technology ,  and a decade plus of continuous operations at net profit, zero corporate debt, zero dilution. Curious then that a respected fund, Francisco Partners, invested in a shell-like GXS…..a company that committed preemptive antitrust violations reminiscent of an AT&T  of the ’60’s and ’70s.  That era of Institutionalized Antitrust (planned Antitrust, business as usual antitrust) was shameless.  AT&T’s routine of bulldozer acquisitions were always accompanied by an implied threat of (voice) traffic blockage (local and toll termination monkey business).

However, it was an AT&T Executive (Kingsbury) that facilitated AT&T’s era of reform. I still hold out hope that one honest man, a partner at Francisco, will ask GXS why are they doing this? Because, in the final moral analysis, cooperative interconnection built the EDI Comms industry and sustained it. Finally, there is a very strong business case for GXS cooperating with Loren Data Corp. I will cover that case in my next posting.

GXS can adhere to fair interconnections practices, avoid antitrust violations, potentially avoid FCC’s Common Carrier Bureau, and avoid becoming subject to regulations and tariffs.  All of the foregoing is  both quantifiable risk balanced against questionable and illegal practices, and at the very least, Tortuous Interference.

The Sherman Act, Section One, Per se violations*, as wrought by GXS against the industry’s thought leader, Loren Data Corp  the sole API Utility Scale provider? Such actions do not waft the odor of  Stewardship among the company’s peers. Several GXS Customers in their top-tier are very, very unhappy, and many more are disgustingly dissatisfied.

Refusing to exchange message traffic that contains UCC instruments (electronic purchase orders and invoices) between mutually contracted parties  (one on ECGrid VAN, the other on GXS TGMS VAN),  shows a weakness and an implied admission that GXS’ nonplussed clients understand all too well. They would, as a group, move en mass to a faster, leaner ECGrid VAN. The only thing stopping the mass migration of TGMS subscribers to ECGrid are operational issues. Loren Data, through expert network engineering and top-notch management, has never dropped a message in the entire history of this debacle – although the company has borne increased costs to steer traffic to TGMS, cost the other at scale peers are not burdened with.

Where is antitrust crusader Joe Wayland (DOJ’s newly appointed Antitrust Chief)? I would assume he is cleaning up several messes that were a direct result of several HSR (Hart, Scott, Rodino) reviews  jammed through the agency vetting process sans due diligence; otherwise, how could this happen? 

Blame the FCC for allowing an AT&T style monopoly to grow past the boundaries and benchmarks of a Common Carrier and sprout as an Essential Hybrid Message Switching Facility right under the agency’s nose  – I will stop short here.

Who cares if the PE Funded EDI Behemoth, universally reviled, squashes a singular innovator? Todd Gould, the industry’s lone advocate of Interconnection Equality has written that connected markets are always more economical for the end users, because interconnects support addressable endpoints  at the lowest costs.

Now does everyone see why this is called antitrust?  GXS burdened Loren Data Corp over their fear of access to EDI comms being universally democratized; Loren Data’s ECGrid VAN and API solve this singularly sticky wicket.  And, as all VANs in the past agreed to exchange  message traffic with their competitors over the last two decades, for the sole purpose of expanding the market. It was the one thing the VANs collectively got right. Since then, not one new VAN has entered the market, and the end users are investigating all sorts of VAN alternatives, even as the largest addressable population of trading partners is still VAN resident. Reform is but a policy decision away….but I digress.

There are no new VAN!!!!  Not for 10 years. The one VAN that opened access to new business (service Providers) is being knotted up  by GXS.,,,,,get it? Judges, Clerks, get it? Industry ? Get it?