It’s my job to keep an eye on the B2B networked services sector; I keep my ear to the ground, and I’m always available for colleagues to call and sound out issues. I’m not a psychic, I don’t relish prognosticating (ok, I do enjoy prognosticating). and I didn’t anticipate the OpenText deal, even after EasyLink was bagged. I didn’t think there was enough value in GXS, even for a notoriously sharp-penciled OpenText. However, the consensus from those enmeshed in this B2B services market, is that they (and their clients) are ready for a change.
I’m not a career counselor, I’m a sector advocate; I chose to work in the B2B coverage sandbox (maybe it chose me). I am predisposed to call out trends, baloney, mistakes, blunders, misallocations, misjudgments, and abuses with a capital ‘A’. It’s all my opinion, and quite a few people vociferously take issue with my POV.
All of the discontent expressed within the EDI communications services sector falls under one rubric – the lack of industry stewardship.
First, let’s get a few things cleared up. I am pro market, I’m pro PE, ok? These are my public declarations:
- There is nothing wrong with making mistakes, if the responsible parties take corrective action.
- I have no bias against Private Equity, I support access to capital;
- There are many good companies that suffer from non-fatal weaknesses; many of these are prime targets for turnaround.
- There is nothing wrong with executing a multi-company planned consolidation, in order attain efficiencies of scale.
- There is nothing evil or improper in harvesting an equity placement via IPO or sale.This could be my own problem of misperception, but I seem to unable to abide the obduracy of our sector’s worst offenders. Call me a network effect moralist.
We need stewardship, ample supplies of ideas, and inspiration, especially from colleagues with a proven track record of execution. We need to reinvigorate the applied art of application layer services. We need visionaries who understand the unique power of networked markets, and who truly appreciate the power of interconnection. Interconnections create markets. Dishonoring a peer network discourages investment, dissuades users, delays new technologies, and ultimately leads to the collapse of connected economies.
Has any multi-provider communications market thrived amidst an interconnection battle? Does casting end users as pawns (in a mercantile dispute) serve the purpose of expanding the market? Why has the FCC shirked its most basic duty? Is this what a successful specialized messaging market looks like?
Divestiture, post-reform act deregulation, consolidation, monopolization, etc. What went wrong in the Value Added Network sector? Before a quick conclusion is drawn, let me state unequivocally that I do not hold GXS responsible for 100% of our sector’s ills – not by a long shot. Their lack of stewardship is by far the worst sin. Is everyone telling me that the EDI comms sector operators cannot agree to simply deliver messages as addressed from the originating party? The originator as party to a transaction has chosen their network, and that network is playing its role in forwarding that message to its destination. It’s very unfortunate that there was not enough early vision in this layer seven market, that each interconnect had to be negotiated individually, rather than being attachment neutral, where all messages are treated equally, and automatically forwarded to their destination as addressed.
Subjecting each interconnect to traffic vs. competitive weighting has resulted in a type of anti-end user madness.
The lack of cooperation amongst colleagues has made the EDI messaging sector a place where customers are, overall, unhappy. The state of B2B services has lagged the broad Enterprise 2.0 sector, and pricing is the least of the problems. A burgeoning cloud infrastructure market is practically giving away compute, storage, and global IP data transit, yet the EDI sector is still mired in apathy. What gives? My advice is simple: Get your MESH in ORDER.
Abuse of policies that facilitate the reciprocal delivery of interchanges, which allowed a portfolio of acquisitions to profit, is an act of particularly poor network citizenship.
The foregoing will eventually lead to a loss of trust among the marquee hub-class clients, and the fallout will be shocking. The interconnected VAN sector is at risk when customers cannot rely on the pathways to their trading partners being available – and they have options other than VANs.
Prophecy: a smart, fast thinking, and innovative company,maybe something like SnapLogic or similar, will take action to subvert the fat traffic KC model. They will yank application message routing away from Legacy Specialists (VANs), they will deliver streaming cloud solutions that will even make the data layer services, like mapping, obsolete.
Top Down, Crammed Down your throat Implementation Guides….will be history. You are all letting this happen. I warned you.
Fix your network, people, don’t let a bad actor take it over, it could be anyone’s neck on the block, next.
The lack of Stewardship among VANs resulted in this state of affairs; if the technical management of the various networks met regularly, and set modest standards for interconnection, acting to censure rare bad actors…..we would not be in the position we are in today.
There is plenty of business still to be gained in the B2B sector, and the SME segment is not even close to saturation. There are new solutions to be delivered, while the cloud is still young, as the cost basis of services delivery continues to fall. Whatever gets the job done is alright by me, via standards, trade exchanges, commercial exchanges, or revamping traffic reciprocity agreements. Liberalize inter system interconnections – set standards for layer seven peers, as well as for transit customers. Learn from the IP layer network operators.
Sector consolidation caused some damage to our customers, and there is a mess to clean up. There is simply no profit in maintaining grudges, and I personally know that certain parties who have been damaged will gladly look to the future, and even seek to collaborate afresh.
OpenText, welcome to the neighborhood, where new loyalties and cooperative associations will surely be built.