Early Release Abstract – Examining the Qualitative Attributes Used for Selecting Investment Worthy Ventures in the B2B IT Subsector

Examining the Recent History of Qualifying Investment Worthy Target Ventures in the B2B IT subsectors.

Alan D. Wilensky, Analyst and Industry Relations Advocate
bizQuirk, LLC.


Is the The B2B IT sector a difficult arena to source and place capital or, conversely, to harvest capital out of such deals? According to a diverse pool of analysts, including several specializing in the enterprise software and services sector, the past 15 years of high-profile B2B tech company consolidations driven by certain PE funds, has resulted in a reduction in overall availability of mid stage direct placement capital deals for well-established, maturing ventures poised for growth. This reduction in capital resources, and how it came about, is a troubling tale. The epilogue is even sadder as if that were even possible, describing the pollution that occurred in the aftermath of the B2B consolidations. The selection criteria and commonsense values became out of phase, upside down, leading to long-term damages. These are the wages of fear and doubt that reliably occur when sound targeting attributes are ignored. Applying the corrective selection targeting criteria  – no MBA required – when the next phase of capitalization restarts – and we shall see that these mature, well led, clearly innovative B2B ventures come to the surface, with long-established continuities of private ownership; these ventures have been overlooked en mass for the past 15 years in the B2B IT subsectors.

While it seems a bit  farfetched to state that, “better companies were deliberately ignored in favor of the now well-known, (even infamous) weeble-companies tagged by PE’s for toxic consolidation). They were all past their prime,  overstaffed, overstuffed, having long abandoned their founders drive and vision, and eschewing the technical staff’s architectural and system acumen.  The sordid mess, in a nutshell, stank of corruption, but there is still hope….

We all know that no one can stop a true inventor –  the Edison’s, the Teslas, the Jobsian leaders….these brilliant, hard-headed, are true to themselves (and to the very wordInnovators  –  they never go away, they continue to innovate and improve, and gain more ground.  Continue reading


EDI Communication market up in the air, up for grabs, consolidation notwithstanding

My analytical writings for lawyers and regulators have covered the dynamics of interconnections between networks in general and VANs in particular. To say, “The VAN industry was built upon collegial and permissive interconnection policies, in order to create and sustain its nascent sector”, is an ex-post facto spin. The facts are more raw.

I believe that this industry sector called “EDI Value Added Networks”, is in potential jeopardy unless it regains a unity of purpose. That is the sum total of the client satisfaction surveys aggregated from 3 major investment banks, plus my own focused telephone survey of GXS hub class clients, over 800 in total. All of the normalized results point to a damaged and deflating sector. Meanwhile, the transactional volume climbs, which is an indicator  the health  of the underlying technologies – however, there is ample room for improvement even in the tech space of EDI systems.

The EDI Comms industry, writ large, is the beneficiary of a vision, but finds itself running on reflexes, reactions, which will not allow the market to continue forward. If my colleagues do not consider the outlook quite so black, it makes the situation worse – as an institutional blindness may be setting in amongst analysts, and it’s our job to watch things closely from afar, to point out missing elements, while taking the temperature of the customers. With that all said, I don’t like what I see, and if GXS’ track record is being swallowed whole by savvy Opentext, this is just more fodder for negative speculation. Additionally, the endemic weakness of SPS Commerce in its back-end services infrastructure, counterpoised against its stock price and market cap, seem disconnected from the standpoint of critical reality….this baffles me, but at least SPS has created efficiencies in the market for the SME suppliers. I can’t see one good thing arising out of the GXS PE funded rollups. I can say there are many ex-Inovis customers that were thrown onto the GXS heap, and they are a very unhappy user population. Take that one to the bank with the previous generation of ex-IBM IE customers. Never has a 100% functional and robust VAN property been intentionally broken by its new owner, like IE was by GXS. Awful bloody awful, it was.   Continue reading

VAN Industry End User and Major Account Narrative Opinion Study

As I mentioned in the opening teaser for the upcoming VAN Sector Review, I decided to take additional input from the following end-user constituencies:

1) Major Accounts of any VAN or EDI network in the global mesh – if you want to have your opinion tallied, contact me @ about.me/awilensky

2) Employees of MegaVAN One – or any VAN or service provider for that matter – do you want to crow or complain, are you busting at the seams to blow the whistle on some dastardly actions? I will keep you safe and anonymous – a subpoena wouldn’t get squat from me – I’m an itinerant analyst on the back of maxi scooter, working via my Macbook Air – I’m the righteous wind, your evil employer is a stolid inane drone.

Conversely,   if you feel that there are praiseworthy things to say about the  VAN or major EDI network you work for, I will give any positive viewpoints equal weight – subject to the same reality checking I do on every opinion survey.

Your opinions count. The results of this user survey will not only be used during the composition of the review, but will also be used by the sponsoring investor pool to steer funding of new products in the B2B sector. It’s anonymous, you only have to disclose to me the bare essentials, and I have stayed alive and employed in the B2B products sector by keeping my promises.

Your candid opinions of the status quo is where the next innovation comes from.

Ok, you brave, brave whistleblowers, EDI Evangelists, and Contrafactual crusaders, the NSA don’t give a crap about EDI and VANs, so open up the taps and gush forth your truth to Skype: awilensky email: abmadw@gmail.com

Act Now in Defense of the EDI Communications Market

Take Action Now to Preserve Fair Competition in the B2B IT Communications Sector.

Influential GXS Customers:

1) Demand in unambiguous terms, that your suppliers retain their unencumbered right to select the EDI VAN, B2B SAAS provider, or supply chain service provider of their choice. Insist that your EDI network messaging provider respect your supplier’s choice of EDI network. Period. Tell GXS that you stand behind your supplier’s selection of EDI network  provider. Leveraging any supplier’s access to a GXS resident Hub via interconnect pathways, called ‘route arbitrage abuse’, is sufficient cause for terminating a contract. Any entity that acts to impede the contractual relationships between buyers and their supply chain members needs to be put on high notice that these actions are unacceptable.

A prestigious corporation using GXS-TGMS for supplier communications should not tolerate these factitious, manipulating actions by GXS. IT Directors and CIOs would never accept any such  action by a telecoms provider, ISP, data center, or 3PL;  and it is similarly unacceptable for an EDI Messaging provider to dictate terms to your supplier community – especially if the terms are sure to increase costs to your suppliers.  Retailers,  Manufacturers, and Consumer Brands – if you are a wise GXS’ TGMS VAN customer, please take action and contact me, or the DOJ,  FTC, or FCC, they must hear directly from as many GXS clients as possible. Let us work together to eliminate all such market limiting actions that are perpetrated against your supplier community.

2) The Most influential Actors in the EDI communications sector are the Retail, Manufacturing, and Logistics Hubs; your trading partners ability to comply with  complex EDI requirements are impacted by having as diverse a range of EDI Services and providers, solutions , software, as possible. The EDI market is impacted by the adherence to transparent and ‘value free’ message routing across all major VANs and service providers. As I am concentrating on VANs first, please understand that eventually, all systems, even AS2, will have access to transparent message routing. However, this will never happen if GXS has their way…..for the way of GXS is to herd, yes herd, all  end-users onto TGMS, and to eliminate VAN interconnects totally, the Sherman act be damned.  I want to personally thank the DOJ for conducting such a smart and savvy HSR review of the GXS Inovis merger – NOT! The DOJ essentially franchised the monopolization of the EDI VAN sector by giving the green light to an avowed toxic monopolist who had shown in their past actions to abuse the power of EDI network traffic exchange agreements…shame on you DOJ. And, shame on the FCC for although being fully briefed on the impact of GXSs actions, has not taken one step or action to protect just the interconnections of this vital communications sector. Feh. 

Hey DOJ, Joe Wayland, Antitrust Crusader and new Division chief  – WTF! WTF! WTF!

Hey! FCC. Your agency is the Nation’s Communication’s watchdog! WTF!WTF! !!!

Professionals in the B2B IT market simply understand that ensuring the availability of cost-effective and diverse EDI services for all suppliers, large and small alike, starts with solid, standardized, ubiquitous communications services – the more diverse and innovative the better. The unprecedented abuse of established and settled interVAN routing policies, leveraging the consolidation of the VANs GXS acquired  (IBM IE, Inovis, and GEIS), is tantamount to admitting that the behemoth is simply unable to synthesize a credible way of competing with a brilliant Mr. Gould, whose ability to innovate as fast as he can type into Visual Studio – is uncanny.  GXS could only wish…..

The B2B communications sector has very few such prolific innovators – Todd created the one and only VAN built from the ground up for big traffic movers, like SPS Commerce, other Supplier enabling service providers, and the new breed of Virtual VANs.

Finding common cause between the Hubs, their suppliers, and Loren Data Corp is my singular quest ; GXS client’s should understand that they can make a difference, the big hubs can get involved and stay with GXS for all I care , as long as you all get involved. It will be worth it, and we will have a better market with stable prices for B2B Comms services, and better accessibility for your suppliers, at prices they can afford. 

The converse also applies: If GXS kills off Loren Data Corp, and then moves on to suck the blood from all other VAN interconnects….oh you don’t think they are stopping with Loren Data, do you? Please, open your eyes.

And I am not even saying that GXS should not be  in the market – after all the company has consumed 500 million in equity and has access to over 400M in credit facilities. GXS as a company of human capital alone has a scale that is simply unapproachable by most other companies.  Loren Data could take on the comms of a few GXS customers that only require messaging services, but for massive armies of engineers and B2B system techs? GXS, IBM Sterling, and one other…..maybe.

In regards to the issues of ‘what is right, what is reasonable, and what will work for the large hubs and their suppliers….. at least one does care:


http://www.LD.com from the President’s Blog:


and the deluge of comments continue on Yahoo Groups EDI-L, the oldest listerve on the EDI universe. Here is also a growing collection of comments across many blogs and groups:


Continue reading

Cloud insanity – the Shills come out of the woodwork

oWhen people read my posts and comments on other great blogs regarding my opinions about rating and certifying cloud hosts, SAAS, PAAS, they sometimes think that I am 100% against cloud based soltuions. This is patently incorrect, as I routinely recommend hosted SAAS for project management, small business, budget constrained start ups, etc. What I do not recommend is that mid market businesses that have CLOB (capital line of business) applications, hosted on their own racks, or managed by a conventional, stable vendor, change to a cloud solution until the PAAS and SAAS providers get industry rating and certifications. The SNA shops knew this, and went through the in house/ hosted rating travail. The result? An industry in which any business owner can get insurance for business continuity disruption that is caused by IT systems failures. If you are a mid sized business with an internal server rack, distributed multisite architecture, or a hosted AS400 or new IBM architecture, you can insure your operations. You can insure any Redhat, Microsoft, BEA, Websphere, whatever installation, managed and rated SAS70, or hosted in your unairconditooned broom closet, but it will cost a little more. A nice underwriter will come to your place or your managed host’s place, and write a policy.

Can’t do this with the current cloud offerings. Doesn’t mean that cloud computing ain’t here to stay, but some folks take issue with me saying anything regarding the unrated and uninsured nature of the especially thinly capitalized PAAS solutions. Oy! But now, a shout out to a hero I have never met, Jane Mcarty,  – yeah! yeah! You go girl!

Jane actually puts her hands on web hosted apps, asks and applies proof of feature performance criteria in much the same way that any good CIO or upper level staffer would do with a licensed server application. Jane uncovers such simple and basic things that one says, “the PAAS vendor didn’t know that?, huh?”. Good on you, Jane.

It was on Jane’s stellar bog that I spotted a comment thread a few days old, where a shill for the cloud industry says, in so many words, that the time to question the cloud hosted apps is over, they are established and able to deliver, and that self styled analysts, like me, have NO BID-NESS asking what if the service goes down, whaaaaaa! Self hosted solutions go down. And then commenter Russell says one of the most amazingly naive things I have ever seen in print, maybe in my entire life”: See the actual thread here.

Commenter Russell on Jane Mcarty’s blog thread”

“Many of the PaaS providers are in business with deep pockets (Force and Quickbase), well funded by professional investors (Bungee Labs), running with established management teams (Quickbase), or conservatively managed with established customer bases (WorkXpress).”

Ok, where do I begin to refuse this insanity? How about the TechCrunch.com deadpool? No? Lets start with a quote from Tref Laplante,, a principal at Workxpress.com, who says:

WorkXpress is committed to its customers and the quality of its product.  To this end it is a privately held, revenue generating company that to date has not received venture capital funding, and therefore is not under pressure to behave in ways that run counter to its mission of customers and product.” (emphasis mine).

You can see my context on this piece of Mr. LaPlante’s unassailable logic here. But, I digress. And I wish nothing but good for workxpress.com.

On the one hand, we have Russell the unknown commenter saying that VC funded PAAS platforms are an assurance and a bulwark against the vicissitudes of having a mission critical platform beyond one’s ultimate control; Partnership disputes, forced sales by the limited partners,   and raids of the venture’s bank account by coked out CEO? Pay no attention to the man behind the curtain. Ok, got it. VC funded PAAS, though unaudited and closed to inspection, and with unknown capital reserves, is safe because is overseen by, (wait for it now) professional investors. Gawd.

On the other hand, we have a principal of a popular, (and in my opinion one of the better) PAAS shops saying that because they are NOT VC funded, they are more trustworthy, due to the fact that they are, so to speak, master baiters of their own hosted hooks and fly rods

In either case we have no idea how much runway the venture has as far as operating capital is concerned. In the case of the giants (Amazon, Intuit, Google, Gogrid, Rackspace ), when they go down, it doesn’t matter because then it is bad and you will merely get an apology and a small refund.

If your business lines are damaged, taking crucial cash flow out of your pocket, and goads the potential for civil liability (in cases of service critical business), then you are truly screwed doubly, as there are no lines of underwriting that will insure a PAAS solution for anything but the actual costs of the outage.

You people are wearing me out.


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The Problem of Wanna

Scott Karp is a famous blogger. I am not. But, his post on the struggles of the newspaper industry, and how this relates to GM‘s last ditch effort to innovate with their Volt project, is very good reading.

That’s a long sentence. I’m not a good general writer, I’m more of a technical marketing and research type. The article, however, grabbed me, because I once worked in the electric vehicle industry. My experiences at a small, secretive Israeli EV startup, was very similar to my misadventures in trying to raise capital in Sillyclone Valley for a faltering independent mobile dispatch venture called, ThruDispatch.

Mr. Karp conjoins GM’s monumental myopia (ignoring anything having to do with advanced drive trains) with the newspaper business’ total lack of a new media game plan. I see the common thread – It’s called, “Wanna“.

Over the past 10 years, a parade of inventors and young alternative drive train companies signed NDA’s with GM, hoping to get a foothold. They came from all sectors of the component, engine, and fuels industry, with patents galore, and some of them were indeed astounding; hopefully one day a book will be written. One company had a a fully tested AC drive train that could also power your house or sell back excess power to the utility grid. But we never heard about them, because GM didn’t wanna.

In the midst of the Web20 semi-bubble of 2005-06, I wrapped up a six month contract at a Sillyclone Valley R&D lab, and took to the road to pitch a plan for a really innovative, user driven, mobile dispatch venture for independent automotive servicers. Thousands of potential Nextel subscribers were surveyed, all had agreed to pay a decent monthly fee, and a prototype had been in place for a while.

But, if the business plan or pitch didn’t have the words “social network, video, or Facebook App”, there was no getting past the gates of Sandhill road. They didn’t wanna.

Now that we are on the threshold of what will surely be a blood bath of failed, ad-supported YAVSS and YASN ventures, in the midst of an IPO desert, will the equity come around to wanna?

Will they wanna invest in services that working people of the middle class will pay to use, rather than the chimera of free and ad supported services that are doomed?

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What happened to the ThruDispatch Articles??

The business plan and slides for Thrudispatch, the intelligent mobile work order scheduler and virtual AI Dispatcher for Self-employed independent service  businesses, like Towing and mobile locksmiths, etc. can be found on Scribd.com


I want to give credit…but?

This hilarious shot of a Paul Graham robot killed me; I want to give a credit, but I don’t know who.

I pitched to ycombinator regarding the ThruDispatch plan (not in person), and I think, Mr. Graham wrote back (which was nice), “why the hell would you want to go into that business?”.

I love the whole ycombinator setup. And you can see some video I took of the Former Kiko crew on premises there. Here we are. Video of the Kiko founders at ycombinator.

Check this out:

I think the photo credit links here

Techno Reality Dame Confidential

From the Series, ‘Down and Out in Silicon Valley’.

(Names and locations changed to preserve the privacy of those involved).

After the last troubling meeting with the tech-slackers, I had to see Tabbatha again. She stood out as the one with understated elegance, and showed no need to tear down the idea as a knee jerk response.

Indeed, the response I have come to expect when presenting ThruDispatch was not a cool refusal, but a vehement castigation of the idea in its essence. These exchanges were often punctuated with an assault on my character, resume, acumen, and motives. You could almost certainly identify which coast the critique originated from – bile and personal attacks generally came from the Bay area, cool refusals and weak advice from the Yankees.

Tabbatha agreed to see me at her workplace conference room. She was a partner in a prominent design studio, and highly placed, at that. It made me wonder why she was hanging with the slacker programmers at that Mission District hole of an apartment? So I asked, “what gives, Tabbatha, you have a really prominent design job, are technically very savvy, and I see you now dressed in a very sharp and conservative getup. Hmmmm?”, and I gestured at her designer business outfit. Continue reading

Sacramento – the sacred place where no tech gets done.

None that you have heard of, anyway. That’s because what goes in the valley, behind the funding, the side deals, the dirty deeds, is profane. Just like a David Lynch film title, town monikers such as Sunnyvale, conjure a veil of hidden evil. Sand Hill Road, envisions a den of vipers hiding in the obviously gritty substance.

The Bay Area will garner fame yet again for the redundant capital placed in YAVSS and YASN. Yet Another Video Sharing Site and Yet Another Social Network will be our legacy for this upcoming foul year of our lord 2008.

The vortex of financial woes in the larger economy, which thankfully shall not be repeated here, will extend inexorably toward the cherished technology forges of Silicon Valley and the Bay Area tech shops, crammed full of ‘Silicon Valley Undertakers’; men and, increasingly women who have developed a serial reputation of raising, burning, and selling off half started technology properties, many of the last round, clones of YAVSS, and YASN.

So Sacramento may have an exalted name and no tech credentials, but the Silicon Valley is unholy altogether in it’s capitalization practices of late.

It sometimes happens that vertical markets with proven business models in the old economy, primed to take advantage of the new Web 20 technologies that have sometimes languished in consumer ventures, are slapped down good’o, by those who should know better. These smaller, saner markets deserve a hearing, but are often shut out by the noise of the YAVSS and YASN. The unholy gatekeepers? Please – the VC partners. The blood of the valley will ultimately be on their hands by way of their closing every avenue to some of the best blue-collar mobile ventures.

And, no, I’m not just speaking of ThruDispatch, my errant venture. I’m speaking of tales of woe gleaned from entrepreneurs with much better credentials and curriculum vitae than myself.

This article shall be extended when I cool down.