My Personal opinion of the Loren Data Corp v. GXS peering and interconnect spat

here is how I see it.

This post is now superseded by the later post, “The Central Issues of EDI Communications Industry Advocacy, the Truth behind GXS’ facade, and the true meaning of developments in Loren Data Corp v. GXS Inc.”  But for those who hate reading long form posts, there are three issues plaguing the EDI Comms Industry, most of which can be traced to GXS (only three, yes, three main issues discussed in the next article). Even companies that are satisfied clients of GXS TradingGrid, and who are perfectly happy with GXS services, should be aware of the central issues that have been surfaced in the GXS defense of the Loren Data Corp Antitrust case. For the unsatisfied, those who are somehow bound, or who feel captive to GXS, your gentle cohort is honored here. For those experts and analysts that watch the B2B IT industry, and who care about the evolution of services in the Enterprise 2.0 model (Cheaper, ubiquitous, easy, open),  we who are not captured in an analyst bureau that is bought and paid for, know that most of the ills plaguing the EDI industry, are traceable in part to the dynamics arising from the Private Equity investment of Francisco Partners in GEIS, the buyout of the IBM IE VAN, and the subsequent purchase of Inovis. The newly birthed entity of GXS Inc., from  top to bottom, has damaged the long-term prospects of the B2Bi industry and attenuated prospects for vigorous innovation. I have been covering the B2B sector independently since the late 1990’s as a general analyst, and since 2004 specifically as an analyst specializing in product advocacy.

Ignoring the boilerplate “hallelujahs’, of Gartner / Forrester, and focusing instead the issues relating to EDI communications and internetwork policy, GXS’ buy-a-lotsa-VANs-roll up has been an unmitigated disaster, with Loren Data Corp featured as the opening gambit, an initial casualty and test case of what awaits the industry, once GXS gets past the DOJ’s short-term memory, or other legal challenges, and commences to crush under their PE funded boot-heel the remaining EDI providers that they can’t buy.

I am sure that GXS excels in many areas related to large scale systems management and deployments; they are a big dog. They are not without any value whatsoever! But the GXS brand image, at least looking at the sentiment analysis of the Yahoo EDI list – is tarnished. Posts and reviews by former and current GXS employees on GlassDoor.com reveals some pretty ragged insights about the corporate soul of GXS, all from insiders with something to get off their chest.

Take GlassDoor reviews for what they are – but there is a remarkably consistent darkness surrounding  the opinion of these ostensible GXS insiders. More importantly, and to the point, is GXS the industry steward, sector leader, and corporate citizen that we would voluntarily choose? The company and its executives are in a remarkable position to do good in the EDI industry, and would not lose one dime by growing a corporate conscience.

I am going to expose my personal opinions of what Loren Data v GXS case represents, why antitrust law is ill-suited to the current problems that arise from GXS’ hegemony of the EDI Communications market, and how this mirrors  other communications monopolies that took years and decades to topple. As an industry, we should be more agile and proactive in addressing  the ills that are centered around message routing and internetwork relations. Courts and regulators should be better briefed on these issues, and not be so susceptible to blatant misinformation hiding as legal technicalities and fancy lawyering. The regulators should really give EDI Communications the pride of place it deserves – and with a light touch, help the advocates of open EDI Communications steer the sector towards its most laudable goals:

1) Open access for any trading partner, from any trading partner, to any trading partner, without gatekeepers or permissions, in the globally routed system of VANs, Specialist EDI networks, and service providers

2) The Free Choice of Communications and Services Providers by any business with a legitimate need to participate in their partner’s supply chain operations

3) Lower rates with better services based on innovation and competition in a free market.

Those preceding attributes are utter anathema to today’s GXS – but such attributes sound to me like the best values of Today’s Internet, to me. Its E2.0 Baby, its ECGridOS!

The core issues plaguing the EDI Comms sector, mentioned earlier, are as follows: (and then I will stop and work on my longer briefing)

• The need to establish a value free, non-discriminatory, routing agnostic system among commerce network operators.
• The emergence of a toxic Choke Point, or hegemony granted to one network (GXS), this franchise coming via both the purchasing power of Private Equity, and a lack of industry unity, or an unwillingness to act.
• GXS has compiled a long list of influential supply cain clients; without the consent of these clients, GXS has used their “must route to” status to muscle their trading partners onto VANs that GXS has blessed, or onto TGMS itself. (these clients will not be so blissfully naive much longer).
•  The total lack of trading partner advocacy whatsoever in the industry, and a total absence of control over their own data communications.
•  The stagnation of the EDI Communications market among a few providers that have contributed virtually nothing to the state of the communications art. If you have stopped innovating,  then at least participate in the higher values and aspirations of the market, and contribute by getting out-of-the-way, taking a stand, or doing something for the trading partners who are your clients (maybe stop making them sign multi-year locked-in agreements – a sure sign of weakness).
• The creation by GXS of a small, disadvantaged class of otherwise respected and august EDI system operators. We know the Loren Data Corp has struggled to obtain the right to route to GXS, and this reasonable, collegial request has netted nothing. The author would remind all concerned parties that what are called VAN interconnects, are really misnamed – the truth is that VAN interconnects are really “message exchange and forwarding agreements” – and are controlled by a body of laws governing the bailment of messages between contractual parties.
• It would be well to recall, that the loss of a forward-thinking (API for EDI Network Ops), independent EDI network operator, such as Loren Data Corp, would be a tragedy for the users and even other VANs – as having an independent operator operating in the ECGrid model (no end-users, no Value Added services such as mapping), as a conduit to most service providers, brings EDI to new trading partners, which in turn drives traffic to all of the VANs with minimal support overhead.
• For the rest of industry sitting on Laurels: enjoy, for now, your GXS interconnect, look and notice well, as a distinguished colleague and EDI expert, Todd Gould, Loren Data Corp’s founder and CTO, fights in virtual isolation. This is a sad, sad commentary to witness:  blatant ass-covering, hiding behind yo momma’s skirts –  why not pick up your phone and have a frank conversation with Todd about where the industry is heading, what will be the impact of a badly behaved MegaVAN#1, and what you can do, either technically or financially, to put the scales back in balance. This goes for the trading partners too, especially those GXS clients with trading partners on ECGrid – you are being unwittingly exploited.

So stay tuned for the big monograph covering these issues, especially the impact of the latest motions in the LD vs. GXS, and what it all means in the greater context. (GXS was granted a motion to dismiss the Federal Antitrust charges, while certain claims stood, and Loren Data counsel says they will petition for leave to amend and address the technical deficiencies in the original complaint and answer to the Motion to dismiss. As the Judge’s order did not contain the words, “granted with prejudice”, Loren Data counsel sees that there is a way forward. Still, it shows what excellent legal defense a corporation can buy – Chadbourne and Parke’s motion was a tour de force, and it walked the Judge down a road that defense counsel designed for Her Honor – which is what you want in defending the alleged monopolist /antitrust violations in a Federal Case. Loren Data Corp will avail of corrective measures in amending the complaint, will pursue an alternative legal strategy invoking the laws pertaining to the conveyance of message traffic between contractual parties. I also hope to be in front of an FCC bureau or a panel of Commissioners and Administrative Law Judges before the end of the year.)

All of the opinions on this blog are my own.

Support the Yahoo! Buy the put or the call?

I dont know the difference between a put or a call – but I think you should support Yahoo in today’s trading. Why-hoo should you? Let me tell you:

As millions of Institutional Investors read my blog and seek my advice regarding tech sector investments, I have decided to comment with some unsolicited moral porridge, something that shall stick to the ribs of investors and not run off, as tech news is want to do.

Investors! Heed me! Hold off on the Yahoo call. Yahoo’s wise, though beardless founder, has made a decision that is in the best interest of the industry at large, in the long term.

Yahoo is being helmed back to its center; back to the days when lasting architectural foundations of internet systems were made to last and deliver value for more than one trading cycle, more than one quarter’s report.

The merger would have been a drawn out fiasco, and resulted in naught. The new fear of G-d that is Yahoo’s sweaty legacy of this non-deal, is that the preeminent engineers and smart y pants people that built the Yahoo legacy, are for a moment, back in the driver’s seat.

You, shareholder, may be currently dismayed. But what is being built under your arses is nothing short of a next generation platform for network computing and user centered, (social hate that word) networking. The type of cloud that Yahoo is moving to build and the services thereof will last much longer, nay shall endure, far better than the plethora of here and gone social me too crapola from the valley.

What the Yahoo! has done is tantamount to changing the plating of the Titanic’s deck, not the chairs – the turbines, not the band. The officer of the watch saw the iceberg in time, barely. The Andrea Dorea turned and narrowly scraped the Stockholm.

All Success, Cap’n Jerry, aye me boy, aye. All buy Yahoo on the down and show yer support for our stalwart Valley institutions.

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Newscorp Yahoo Deal makes Perfect Sense

Newscorp Yahoo Deal makes Perfect Sense

And, just breaking, a breathless call from a friend of mine that works at an investment bank’s office in the Pacific Northwest, Panting Randy: “…They’re out!”.

I was tired of all of his unattributed news and rumors, but I had a sneaking suspicion that he was on to something, so I wanted attribution. I said, “I’m putting your name on this, brother Randy”. He was intransigent, “oh no you don’t, I’ll get canned.”

Bastard. Stupid Randy, the third tier gopher for investment bank X (who, by the way,  is not retained by the principal parties), says that Microsoft is going to cool the deal, ostensibly due to the (un)anticipated exodus of key management from the Yahoo corporate body. Further, the brain drain encompasses noteworthy personnel that are, and he quotes, the twerp, “key to Yahoo’s long term re-engineering plans to better integrate the visible internet properties.”

Figure that one out. Who knew that Horowitz going to Google would be such a monkey wrench? It’s almost as if Microsoft wanted to just pull their chain and catalyze these layoffs with some added heat.

Now then, Newscorp:

It is a great idea for Newscorp to  bring in a little  money (well, a lot, actually), and combine the Myspace property in the deal. Who better to rework the ugly, fugly MySpace, than Yahoo?

Indeed, Yahoo has the technical expertise to extend and optimize every aspect of MySpace, from cosmetics to performance, and integration with a phantasmagoria of Zimbra email goodness. I’m all for it. The Newscorp deal fits a comfortable valuation, brings in a property with true synergy, and brings that Juggernaut of MySpace to a partner (Yahoo), that can actually do something with it.

They have my blessing.

Acquisition Pressures Accelerate the Pruning of Yahoo’s Purple People

Acquisition Pressures Accelerate the Pruning of Yahoo’s Purple People

I was sitting across the table from a survivor. A survivor. You would think that a person with almost eight years tenure in an exalted technical management capacity would be elated to be telling me his or her story, but this soul was about as glum as can be; there was a veritable cloud in the room.

This interview was conducted with the solemn pledge of anonymity, for obvious reasons. Indeed, this survivor of the Yahoo upheaval chose me because I am an unknown, no account, under the radar blogger. I am sure that, eventually, other interviews and exposes will appear with attribution in various on-line organs such as TechCrunch, Boomtown, or some such.

Such as it is, I am honored to be the anonymous nobody that this Yahoo survivor chose to vent through:

I’m no Genius, I’m No Pundit

It’s interesting to note that all the bullet points mentioned in my Yahoo interview are being reiterated on KQED FM this morning “Forum discusses that question with a panel of experts including Michael Kanellos, editor-at-large for CNET; and Sarah Lacy, author and columnist for Business Week Magazine” – Dylan Sweeny is also a panelist.

What is the consensus:

1. Yahoo never pulled its properties together into a coherent whole
2. Yahoo never took full advantage of its Web 2.0 acquisitions
3. Yahoo shied away from pursuing a more aggressive acquisition strategy when it counted
4. Putting Semel at the helm steered Yahoo onto an ill-begotten road towards becoming a quasi entertainment portal
5. Semel and Decker greatly expanded the upper level management of Veeps and do-nothing directors
6. Semel continued (probably did not initiate, though) the slide from a  technology meritocracy, to an agency business model

So, they agree that there has been a bungling at Yahoo. Many callers also expressed that vehement “Purple Culture”, that is boiling over at the thought of serving a Microsoft Master.

Now, whoever pays your check gets your loyalty, but I am reminded of a quote from the interview I conducted that was intentionally omitted due to its Inflammatory tone:

“If the Redmond management clones think they are going to muscle us and change our user driven culture, I will do all in my power to thwart their efforts, short of insurrection”

Sounds like insurrection to me. Such different cultures, such divergent targets.

Yahoo Culture – What was, is, and Could Be

I am not a professional journalist. There are no ads on this blog, and I have a tiny readership. I use this blog to drive my consulting work in alternative channel marketing and product strategy. Therefore, I don’t have the kind of attributable and authoritative sources that other bloggers have on the inside of Yahoo.

What I do have is a small group of friends and professional acquaintances that are subject to all of the fear and loathing that career uncertainty brings. These folks are not VP’s or Directors, they are editors and community managers, product managers, and software engineers. I met most of them through my work at France Telecom (where I was a contract analyst for product strategy). FT opened doors for an ‘under the radar guy’, like myself. Lots of small Bay Area companies wanted to work with this EU telecom giant, but the only survivor of the internet’s halcyon days to visit the lab (while I was there) was Yahoo.

Anyhoo, when news of a round of anticipated layoffs started to surface, I wanted to collect some opinion from my small cadre of Yahoo contacts – not necessarily for a feature article on Yahoo buzz, but more for a perspective piece on the Valley’s work culture. I’m fairly certain that most folks in the techbiz are aware that prior to the Microsoft take over news, and long before the layoff news, there was a fairly rigorous re-organization taking place at Yahoo that coincided roughly with the departure of Terry Semel.

You may also recall the famous Peanut Butter letter by Brad Garlinghouse (a TechCrunch link here). The Garlinghouse manifesto was the early warning of an impending internal shakeup. Within my network of Yahoos, folks who perform the daily work at ye olde Purple Giant, all have been moved to new departments, placed under new managers, or have been bumped up or down a notch in perceived responsibilities. As a group, these salt-of-the-earth folks all received a small (though by no means symbolic) pay raise.

The following article is a smattering of paraphrased narratives collected with permission. As far as attribution, I was not able to secure the release of their identities, which is understandable in this climate of uncertainty. Perhaps, when the dust settles, said one, we can go on the record.

So, take these observations for what they are: thoughts and anxieties from the collective consciousness of Big Purple’s mid-level ranks, as paraphrased by an amateur blogger.

It’s a take on the culture of the valley we love and loathe so much: