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Web-EDI Solutions Are Doomed, Says Forrester

[London, ENGLAND] The Web is displacing legacy B2B transaction technology Electronic Data Interchange (EDI), says research firm Forrester -- and hybrid Web-EDI solutions will not survive either.

Forrester spoke with 40 managers handling EDI activity at large European businesses, and found that a lot of them are putting their faith in hybrid Web-EDI systems.

Yet Forrester says that EDI trade will peak at 1.5 trillion euros (US $1.3 trillion) in 2002, then decline as companies switch to the Internet using industry-specific XML development and e-marketplaces.

"Unlike their peers in the U.S., Europe's managers are hoping that hybrid Web-EDI solutions will bring them the best of both closed EDI and the open Web," said Andrew Parker, senior analyst at Forrester's European headquarters in Amsterdam.

"But hybrid systems won't fare better than closed EDI. Both limited solutions simply won't compete with e-business networks based on open Net standards and business models," warned Parker.

The pace of change is so fast that many companies in the fields of logistics, retail, and electronics are not keeping up with their most aggressive competitors in developing Internet-based trading solutions.

"New technologies such as ebXML and xCBL will support flexible transactions in e-business networks to deliver multistep trading in real-time processes like auctions, dynamic pricing, and automated substitution selling," he said.

"Partners in e-business networks will replace the limited document exchange of traditional and hybrid EDI with open collaboration based on sharing not only data but also business rules."

Forrester says that by 2005, some of the threatened companies and those in slow-moving sectors like heavy engineering will still be conducting just one percent of their trade in e-markets. To get on track they will need to hire consultancies and use external services such as e-commerce integrators and ASPs, says the firm.

The full European EDI 2000 report is available from Forrester Research in The Netherlands.