Consolidation Continues In The EDI World
Forrester published its most recent evaluation of B2B service providers in October 2009. At that time, the market was dominated by three large providers: GXS, Sterling Commerce, and Inovis. Shortly after this report was published, the consolidation began, with GXS and Inovis consummating a merger in December 2009. In June 2010, IBM announced that it had acquired Sterling Commerce, which was at that time the #2 provider of EDI VAN and B2B managed services. And last week, Liaison announced that it had acquired nuBridges (including its VAN, managed services, MFT, and hosted security capabilities). Bottom line, the market landscape looks significantly different than it did just 18 months ago.
What does this mean for clients who have significant EDI and B2B needs?
- For starters, there is obviously less competition than there used to be, and this could lead to higher prices over the long haul (though the current economic problems are having a dampening effect on this so far).
- Secondly, clients with a long-standing relationship with a particular provider may experience some service issues during the transition to the new organization, and we have heard some reports of problems in this area. Clients need to be diligent in holding new providers responsible for delivering the same level of service (or higher) than what they were receiving previously.
- Clients should pay close attention to B2B service provider contracts that may be expiring in the next year and make sure to leave enough time for effective analysis of alternatives in support of contract renewal negotiations.