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OpenText Acquires GXS: Will Content and Process Management Enrich EDI...
OpenText Acquires GXS: Will Content and Process Management Enrich EDI?
November 19 2013
A decade ago or so, there were three leading enterprise data interchange (EDI) and business-to-business (B2B) network integration providers:
Sterling Commerce, Inovis
. While the latter two merged under GXS in the mid 2000s, Sterling Commerce is now a part of
, a provider of enterprise information management (EIM)software, has announced its
GXS Group, Inc.
, pursuant to which GXS will become a wholly owned subsidiary of OpenText. The purchase price of $1.165 billion is 2.4 times GXS’ fiscal year 2012 revenues. The goal is to onboard GXS to the OpenText operating model within two years.
This acquisition is expected to reinforce OpenText's leadership in EIM by combining OpenText's
portfolio of managed file transfer, secure e-mail, fax, capture, and EDI with GXS' portfolio of B2B integration services and managed services. These combined capabilities should help customers to extend their partner networks to automate multi-enterprise processes and manage value-added commerce transactions. GXS enables businesses to streamline new product launches, digitize accounts payable, automate warehouse receiving, conduct e-invoicing and e-payments, and increase global supply chain visibility.
GXS' cloud-based B2B integration services enable more than 550,000 trading partners to integrate and manage business processes and transactions across complex global networks of customers, partners, and suppliers. GXS' cloud platform, the
GXS Trading Grid
, eliminates the ongoing complexities and costs of do-it-yourself B2B integration.
GXS Managed Services
enables customers to offload complex B2B e-commerce requirements to GXS, resulting in improved customer satisfaction, increased revenue, and lower total cost of operations. OpenText upon closing of the transaction expects to serve more than 80,000 customers and support approximately 16 billion annual transactions in the cloud.
This could be a brilliant move for OpenText, the usage of which has been mostly relegated to IT departments, as OpenText has had to compete with the popularity and pricing of
. This move could take the vendor from IT tools talk into business-oriented supply chain discussions, increasing its value proposition.
GXS had been trying to expand past its historical EDI transaction roots and move into product specifications and data synchronization. Aligning with OpenText and being able to deal with large amounts on unstructured data might make this feasible. And since business networks are not about mere integration but about workflow/business process management (BPM), and content/data synchronization, translation, and harmonization, OpenText’s earlier acquisitions of
may come in handy.
If GXS does not integrate properly into OpenText, it might die a slow death. I share
Lora Cecere’s concerns
. Since many GXS users were its original investors, they may now consider evaluating other solutions, especially if they sense some poor execution at OpenText, which could really accelerate the death march.
It is likely that
Datalliance, Descartes, E2open, Elemica, Exostar, GT Nexus, iTradeNetworks
TradeShift, SPS Commerce
, and others will start marketing their differentiations and spread some FUD (fear, uncertainty, doubt) about GXS. Given that OpenText has been a major enterprise content management (ECM) partner for
, it will be interesting to see whether this merger sours the partnership, given GXS’s possible competition with
To be fair, GXS is mainly about high-volume direct materials and packaging for a relatively small number of large manufacturers (that are probably SAP ERP users as well). Ariba is more focused on indirect procurement (with some dabbling in direct materials) for a large number of users. If anything, the recent change of ownership might allow some big GXS customer to give Ariba a chance in direct materials.
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