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

With VAN Consolidation rampant, are B2B message routing exchanges the answer to total reciprocity and delivery assurance?

Author’s note:

The most fecund source of utter baloney can be found at many places on the GXS website, that basically states, “a one vendor network is the only way to insure EDI messaging reliability”. Bull-oney. I think we have all learned an indelible lesson that multi-vendor, multi-provider markets (including messaging networks) which includes routing networks (like the internet) are the best architectural model to arise in the universe of IT, from both a reliability and economic perspective. I’m sure that the old GXS would like nothing better than to have its customers get everything from its network based services – messaging, translation, applications, maybe your medical insurance too. Maybe GXS would like to arrange marriages?

This article is about an access and routing model that was born in the early Internet years, when setting up routing gateways was a black art – and telcos late to the Internet game started to get hungry again, formed a land rush, buying up many of the first mover IP backbone providers; this is when MCI bagged UUNET, leading to another  antitrust case.

Now, we have a tremendous amount of VAN consolidation with the OpenText deal, and this could be a good time to talk about the CIX, or Commercial Internet Exchange Model. CIX was formed as a shared peering exchange point, a membership organization, that allowed companies to get their foot in the Internet’s door – while the FCC was struggling to come to terms with the Telecom Reform Act of 1996. Ok, that ends my intro – on to the EDI Messaging Exchange Model:

Continue reading

Interpreting OpenText’s Planned Acquisition of GXS

What does the OpenText acquisition of GXS mean for the industry?

The following are my personal observations regarding the GXS acquisition by OpenText. First, these have been calls, too many to return today, many from colleagues in product advocacy. I will return as many calls as possible.

I have always thought that OpenText has been on the right track  since their acquisition of Hummingbird. In the late 1990’s EDM market, Opentext was somewhat the laggard, compared to Hummingbird and certain other document management and knowledge discovery products. Such was that heady era, with tremendous energy misspent on XML databases and such.  OpenText navigated the morass admirably, and kept an eye on capital mobilization, thereby becoming the unquestioned leader in Enterprise Data management and knowledge discovery.

A good example, one of many acquisitions by OpenText was Nstein software, a stroke of genius which brought Opentext into the forefront of text mining, knowledge analysis, and conceptual text element and entity scoring. Bravo. I had delivered a white paper to France Telecom in 2007 on the text mining sector, and Nstein was one of the recommended vendors that had visited France Telecom’s R&D Lab to present their Text Analysis Toolkit SDK. OpenText, unlike France Telecom, had the expertise and cohesive vision to subsume text analysis into their market facing line.  Very few analysts watching the EIM sector comprehend that executing this strategy takes an amazing constancy of vision. 

With the buyout of EasyLink, OpenText purchased a dual technology property with a workmanlike infrastructure. EasyLink had the virtue of being an ex-AT&T property that enjoyed having adequate resources to operate and compete effectively. With the EasyLink’s capture of ICC, the company was able to absorb a highly contemporary and functional EDI communications architecture. EasyLink, as one of the last ‘branded’ legacy VANs, is considered an operation that basically works. The company also has electronic fax and unified voice services, which is very popular with SME’s through the large enterprise.

Analysts with sharp recall see that OpenText’s acquisition of Rightfax, again, shows a portfolio strategy that just makes sense.

One of my sources disclosed that OpenText was researching the possibility of “componentized EDI Communications”,  or EDI Comms as encapsulated services, reduced to a standardized, end-to-end protocol, like email, which is quite different from how today’s VANs handle EDI messaging.  We shall see. I can say that my contacts in EDI network operations have stated that Easylink operations and internetwork relations have not been degraded since the OpenText acquisition.

If we look well past the structural finance issues dogging GXS , which OpenText is perfectly able to address, the most vexing issue remains GXS induced interference in the transit of EDI messages between the Marquee Hubs residing on GXS VANs,  and their trading partners, who are often SPS Commerce subscribers. In other networked markets, these anticompetitive acts would result in a tariff violation, a common carrier enforcement penalty, and be regarded by most as an egregious breach of trust.

The question thereby becomes, will OpenText allow such unfettered abuses to continue? I am 100% sure that Opentext CEO, Mark J. Barrenechea, would more likely take a pro market position, and establish the new GXS as a good network citizen within the global mesh of interconnected commerce networks.

Sound opinions of GXS performance and user satisfaction sought

I am quite sincere in soliciting any bona fide end-users, especially brand marquee retailer and manufacturer hubs, any large EDI communications messaging users that are GXS TGMS VAN, Inovis VAN, or even past or present unmigrated IE VAN customers that wish to make on or off the record statement regarding your satisfaction with GXS overall –

I am not compiling data for professional services or enterprise software sales, and I have not made up my mind on integration or managed services scoring.

What the heck! If you are a GXS client and are perfectly satisfied with what they are providing, contact me at abmadw@gmail.com and I will take your opinion and ask you ten questions. In return, you can ask me anything within my area of expertise = as a full-time B2B sector analyst for new products, and as an advocate for innovators. Pick my brain, go on or off the record as you like.

Ask me anything.

This is the chance for happy GXS clients to give approbation; have they been improving, or not? How’s the support, have they been conducting your migration properly and well?

I will post the survey right here later over the weekend.

Cross Post from Loren Data Corp’s President’s Blog: Antitrust Case Update

Without any editorial distortion on my part, Todd Gould, Loren Data Corp’s President, has posted an update on the upcoming appellate hearing (oral arguments) in re Loren Data Corp v. GXS Inc. It is an important update.

http://www.ld.com/update-on-antitrust-suit-against-gxs/