EasyLink Services has partnered with SPS Commerce Inc. in a deal announced Wednesday designed to encompass small and medium-size businesses in EasyLink's Web-based EDI (electronic data interchange) service offering.
EasyLink will leverage SPS Commerce's strength as a supply chain integration provider to provide the benefits of EDI -- fast, accurate, paperless transactions -- commonly used by an enterprise's largest trading partners to smaller suppliers through low-cost, customized services.
The alliance is designed to enhance Edison, N.J.-based EasyLink's plan to increase the availability of its transaction delivery services through the introduction of Web-based EDI for companies to transact electronically with their trading partners. Moving to adopt newer Web-based technologies is critical for value-added networks such as EasyLink to continue to grow, according to analysts.
The core network Web EDI offering from EasyLink replaces costly and inefficient paper-based processes that create barriers to entry for smaller suppliers into electronic commerce with an economical easy-to-use Web interface that bridges the gap between companies with disparate levels of technological infrastructure.
Small companies can now do business electronically with large companies, without requiring the substantial people and systems investments of typical EDI user environment because SPS via its service manages the trading partner enablement and integration. In addition, EasyLink and SPS Commerce offer customers implementation support.
Earlier this week, one of EasyLink's competitor, GE Global Exchange Services Inc., was spun off from its parent company General Electric Co. GXS had struggled to evolve its traditional EDI offering to newer technologies, analysts said.
GXS needs to beef up its application integration functionality and provide a good solution to reach the smaller companies, such as the offering EasyLink has acquired through its partnership with SPS, said Ken Vollmer, an analyst with Giga Information Group Inc., in Cambridge, Mass.
"Companies really need a complete solution across the board," Vollmer said. "They can't just have one piece for the big trading partners and another solution for the smaller guys. It is a very smart move for EasyLink, and it demonstrates the advantages of not being tied up in a large conglomerate."
EasyLink itself was once part of AT&T Corp.
While many companies have been successfully trading basic information through EDI with their biggest suppliers for some time, smaller partners have been left out, said Jim Frome, executive vice president and chief strategy officer of SPS Commerce in St. Paul, Minn.
"It has been difficult to extend the breadth of that capability to the small and midsized players," Frome said. "Most people are looking for a solution that will allow the entire supply chain to participate every time they roll out a new capability or program."
To date, EasyLink has focused on helping companies that are already doing EDI to perform more efficiently, said Bill Fallon, vice president of marketing at EasyLink. This partnership will add to that to take the Internet paradigm to smaller companies that have not been tapping EDI, he added.
For EasyLink customers, the advantage will be these value-added enablement services layered on top of existing VAN services like connectivity, and security, he said.