State of Networked Messaging 2016
bizQuirk (Wilensky et al)
Transactional Messaging, particularly in the B2B / Supply Chain domain, has been undergoing a series of protracted upheavals for the last decade, some would say longer. VANs, once the stalwarts of messaging sector, find themselves at the end of a long wind down, despite a hectic period of consolidation at the hands of professional PE.
The service once known as EDI messaging (at one time owned by VANs – period full stop), until recently, purchased as ala carte services, is being increasingly mutated into embedded functions within Enterprise Software and B2B platform services (SAAS).
And so on; change being the reliable constant in all things relating to vendor community management in the retail and manufacturing supply networks.
This article is condensed from the larger body of supply chain systems analysis compiled by the authors over the course of 2015, with an eye to calling the dance for 2016 – so far, the data has tracked accurately.
Supply chain systems affordability, availability, acquire ability, and the SME’s entry costs to participate in a retailer’s or manufacturer’s supplier cohort are in constant flux, even as we enter Q2 of 2016. There is, for sure, good news to report. For the bad news, piles of advice from numerous questionable sources are easy to find.
Trends locked in – Winners Consolidate Gains, Losers take a long slide to Perdition,
SAP Alternatives continue to multiply
The story behind the democratization of the SME ERP space, whether server or SAAS, breaks down into SAP Alternatives and the specialty markets. The ALT SAP reformation is functionally married to the opportunity to embed EDI Comms functions into the ERP Stack.
With a relatively few methods to reliably add EDI network management and comms functions to a server container or application stack; the market can turn to one, and only one, API provider, as there are only a handful of SDK, and still fewer native language extensions for .NET and the non-Microsoft crowd. More on this subject later.
Demise of the once mighty Value Added Network
With no absolute need to name and shame, ask anyone in the sector to speak the plain truth – the surviving VANs are experiencing lowered customer satisfaction rankings and declining revenue across the board. The billions in private equity that entered the US and EU VAN sectors have not resulted in better service nor an invigorated and diverse competitive market, Thought leadership and innovation are empty words in the VAN sector, with rare though marked exceptions embodied as iconoclastic torch-bearers notable for their endurance and outspokenness.
Stewardship via industry participation is simply absent among the most highly financed VAN leaders. It seems the best that any of the top two or three VANs come up with is marketing under multiple brand aliases and beating the same tired hype that sounds like a throwback to 1999; not a point of pride at all.
Service Providers: ever cautious – the leader takes action
The study of SPS Commerce is instructive; the company has been through any number of growth phases, also having survived the VAN wars by pure chance. The Company made a bold move (starting in 2015) with the purchase of the York Worldwide VAN to move its messaging infrastructure in-house. The ballsy part of the decision was to part ways, amicably for sure, with their VAN immemorial, ECGrid, with the bottom line of forfeiting the highly differentiated ECGrid technology, but more pointedly, foregoing the support regime refined by Loren Data Corp specifically for SPS.
More than a few B2B Sector Analysts are keeping their eyes on how SPS will manage operations without the master level support supplied by Loren Data’s ECGrid® Netops staff for the last 16 years. We shall see.
The state of EDI Tools and middleware
Mapping has been the downfall of the vendor community. The design-time task of field and data type conversion and element reordering ‘outside of database’ has been THE bane of the EDI tools market..unless you are a tools vendor.
“Mapping tools are for the EDI guys and gals we don’t trust with DB access….”, said a fellow analyst at the OAG 2009 breakout session in Redwood City, “the non-EDI data transformation world has tools for machine driven reordering of data elements between dissimilar systems of record”.
Those with experience in data transformation for systems outside of the supply chain (non X12 / EDIFACT) have adopted canonicalization. Auto glass and mobile locksmiths and other aftermarket verticals have a growing number of tools available to keep the delta (change) logic within each document. OAG has been at the forefront of “logic in the BOD”.
Adherence to an industry canon with segment options as microformats have been proven to streamline run-time translations, and are better solutions than ad-hoc-per-hub element type conversion and field reordering.
The Fruits of Consolidation
The VAN industry persists in its disunity and abandonment of the merest pretense towards advancing a core messaging services stack, that is, state of the art transactional messaging services.
Though the VAN’s cling to the Value Added Network moniker, what B2B services buyers want from a classic VAN is:
- Communications across the global mesh of EDI networks
- Mailbox management (document object storage)
- Seamless interconnection with as wide a vendor community as possible without forcing vendors to locate on a Hub’s home VAN.
- Rich, graphic user interfaces for configurable access to as wide a panoply of communications options without undue complexity.
- Transparent setup of communications options between VAN addresses and AS2 configurations.
The EDI network messaging sector is entering 2016 with a whimper, not a bang. The services being offered from the largest, best financed EDI leaders have remained static, yet the stale policies leading to deteriorating support are dynamic in all the wrong ways, i.e., opaque invoicing, to name one embarrassingly sticky attribute.
On the upside, we have iconoclastic high-integrity leaders that are visible and conspicuous for their outspoken thought leadership – one does not have to hire a B2B sector analyst to find these Scientist / Engineer Founders, the EDI market leaders who have built a legacy of integrity, openness, and personal support and service.
They are the heroes of the EDI Sector examined in the next installment.