Long before the Internet was fashionable, companies used electronic data interchange (EDI) to electronically share information and documents with one another. It was a wonderful innovation that eliminated the need for a lot of paper, faxes, re-keying, phone calls and messengers. It was, and still is, also very complicated and expensive.
Then Extensible Markup Language (XML) came into town with the promise of revolutionizing the exchange of electronic data. Because it moved over the Internet, costly value-added networks would not be necessary. Rudimentary data exchange could be achieved simply by deploying a Web server and an XML parser. It wasn't as complicated, and because it was inexpensive, more people could participate.
Yet, EDI still exists, and is widely used by both government and private industry. It's not considered a "legacy" technology that they keep around only until they get the XML fully operational. On the contrary, organizations continue to rely on it for day-to-day e-business.
XML does, in fact, have a few edges over EDI, because it is more intuitive, less expensive and more customizable. EDI's complexity and expense has, in the past, locked out a lot of smaller organizations. Besides its position as an entrenched technology however, EDI also has the advantage of being more compact. Because it is compressed, it is better suited to high-volume environments (an XML message can be ten times as weighty as an equivalent EDI one).
Nonetheless, many organizations that use XML still use EDI and plan to continue doing so. For an organization to move from EDI to XML would require not only that organization to do so, but all of its trading partners would have to make the same move.
A logical move would be to run both. This, of course, requires a translator that can mediate messages in both XML and EDI. Some of the value-added network providers that traditionally support EDI are also starting to support the XML format as well. Other software, such as webMethods, can also fit the bill. And of course, there's really no reason you can't send an EDI document over the Internet alongside your XML, instead of using the value-added network.
Ultimately, convergence of EDI and XML is inevitable. A sign that this is so can be seen in the fact that the ASC X12 standards body, which develops EDI standards, has approved a reference model for building an XML business message. The reference model will be used to create industry-specific XML messages.