Prep Now for Changes in B2B Integration, EDI Space

Loraine Lawson

SPS Commerce, a supply chain management company, acquired Direct EDI, a provider of cloud-based B2B integration services earlier this month. The press release stated "the acquisition strengthens SPS' position as one of the industry's largest and fastest growing providers of cloud based supply chain solutions."

 

An SPS spokesperson added that the acquisition would give them access to EDI Direct's cloud integration customers.

 

What caught my eye, though, was that the press release also talked a great deal about integration and giving clients access to "one of the broadest trading communities in the retail supply chain with more than 1,500 prebuilt connections to retailers, grocers and distributors."

 

"Community" - that's exactly the type of shift toward greater collaboration, communications and Web 2.0-ness Margaret Dawson of Hubspan predicted last December when she said we would see changes in the B2B integration space. In her interview with IT Business Edge, Dawson said:

If we look at what the B2B integration providers are going to be adding, I think they themselves need to add more of that collaboration-for-business-type of capabilities. So you're going to be seeing, over the next one to three years, an increase in that collaborative, Web 2.0, self-service community discovery-type of capability. I think that's going to be happening across the landscape and the ones that are well-positioned to do that are obviously the ones that are already doing more Web-based, cloud-based technology.

The B2B space actually started shifting about two years ago, when GXS and Inovis merged in 2009. Then, in June 2010, IBM acquired Sterling Commerce, an EDI VAN heavyweight, according to Forrester Analyst Ken Vollmer, who wrote about this market change in early April. Sterling Commerce was the number two provider of EDI VAN and B2B managed services, he said. This year, the acquisitions continued with Liaison acquiring New Bridges.

 


Vollmer says these consolidations could lead to higher prices for customers in the long run. Right now, the economic climate is discouraging the higher prices, but you shouldn't expect that discouragement to continue.

 

He also cautioned that some clients may experience service issues as their provider transitions to the new organization, which means you'll need to be diligent about upholding service-level agreements. He also suggests that you investigate alternatives to your existing B2B integration provider before you negotiate a new contract in the coming year.

 

Clearly, the old-school EDI companies are embracing the new realities of cloud services. This could mean more features for B2B integration, but it could also mean a few rough waves ahead if these transitions take place. Regardless, if you use a B2B integration provider, you'd do well to watch this niche integration market and the slow-but-steady change happening now.



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