IDC Sounds off on EDI Providers

Although e-commerce has captured the attention of thetrade and mainstream press for the last decade, a recent note from marketresearch firm IDC shows Electronic DataInterchange (EDI) remains the workhorse for many business-to-businesstransactions.

The report, titled “EDI Service Providers: A Ray ofHope in Difficult Seas,” compares the relative penetration of EDI ande-commerce. The results may be surprising.

IDC places the value of goods and services sold in 2001through e-commerce at $0.5 trillion, while the value of goods and services soldthough EDI service providers, such as GE GXS, Peregrine, and SterlingCommerce/SBC, at a staggering $1.8 trillion.

Moreover, the report says there is an overlap betweenthe two categories. Some EDI service providers now offer Internet-based EDIservices, and these transactions were counted both as e-commerce transactionsand EDI transactions.

IDC believes Internet-based EDI accounted for about athird of business-to-business e-commerce last year. Excluding Internet EDI, thevalue of goods and services sold over EDI is six times that of standarde-commerce transactions.

The future for EDI service providers is all but secure,however. IDC says the emergence of Internet-based EDI, which uses XML toreplicate EDI categories, may threaten the dominance of established EDIproviders.

IDC believes EDI providers can use these newtechnologies in their favor. IP networks can lower the operation costs for theprovider and bring in new customers who may be unable to maintain separate linesfor EDI. In addition, it notes that carriers who begin to integrate businessprocesses such as ERP and supply-chain management into their offerings maybetter serve their customers. Chris McConnell