Traditional electronic data interchange (EDI) systems are not dead despite the hype surrounding online procurement software, although customers are beginning to look at alternatives.
While users still believe that EDI is better because it is reliable, proven and secure, they are urging their suppliers to provide them with Internet based alternatives because of the new opportunities that Web based procurement presents, according to a new report from market research firm, IDC.
Stephen Murray, an IDC analyst, said: "Many large enterprises maintain they are happy with EDI, but their golden handcuffs will begin to chafe. EDI was invented in the 1960s when there were no open standards to work with and so customers were locked into proprietary networks. The Internet breaks this lock and gives people almost ubiquitous access to different trading partners."
He added that traditional EDI network suppliers were already starting to migrate their customers to IP networks and would have little difficulty in incorporating and exploiting Internet technologies because of their experience in electronic procurement.
He cited Harbinger as one example, which plans to migrate 50 per cent of its users to IP.
IDC predicts that revenues generated from EDI network services will increase to almost $2.3 billion by 2003 from $1.2 billion in 1999.
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