Enterprise Information Management (EIM) player Open Text Corp. just bought its way into the B2B cloud integration market with the $1.65 billion takeover of GXS Group.
So why is a B2B integration company worth so much? Well, GXS supports over a half million trading partners, for starters. And, the level of integration between partners, suppliers and customers can be deep, working across multiple networks and handling transactions and business processes.
The main tool is the GXS Trading Grid, which along with GXS Managed Services does all the integration heavy lifting.
“The next generation of enterprise software is Enterprise Information Management,” said Open Text CEO Mark J. Barrenechea. “Today's GXS announcement strengthens the Information Exchange pillar with the addition of market leading cloud-based B2B integration services, it expands the EIM buying centers and it strengthens EIM with the addition of cloud-based Managed Services.”
The plan going forward is to blend Open Text’s EIM tools, including EDI, secure e-mail and managed file transfer, with GXS’s managed services and integration wares, all to help “customers to extend their partner networks to automate multi-enterprise processes and manage value-added commerce transactions,” the new partners said.
Together the companies today handle some 16 cloud transactions a year from over 80,000 customers.
GXS Studies B2B at Stanford
B2B integration could be a lucrative market for Open Text. Stanford, in a study sponsored by GXS, wanted to know how managed services impacted B2B integration.
The 39-page report from Stanford’s Global Supply Chain Management Forum “B2B Managed Services, Business Value and Adoption Trends” found a huge positive correlation between MSP services and integration. In fact, 96 percent of those polled said their B2B integration programs were made more valuable thanks to MSPs. The survey has semi-global reach, being based on responses from some 100 North American, Asian and European users.
The report lays out a significant disconnect between partners. “Today’s corporations are more dependent upon their business partners than ever. Yet despite the critical co-dependencies, the interactions between companies and their business partners remains highly inefficient. Over 50% of the information exchanged between business partners travels over fax, email and phone rather than flowing directly between business applications via B2B integration technologies such as EDI and XML. The relatively low adoption rate for B2B is amazing when you consider that the first EDI systems were introduced four decades ago an eternity in the technology sector,” the report said.
The good news is that MSPs ease the migration to more automated, efficient and rich communications amongst partners. And, MSPs can also reduce the cost of these communications, the report found. Almost three quarters of those surveyed saw a cost benefit from switching from on-premises B2B integration, which requires significant capital expense, to managed services, which consist mainly of ongoing operating expenses.
Edited by
Blaise McNamee
