Keeping Track of the Trades - Data Harmonizing and Integration Companies' M&As
The ChainLink Team
on Sep 11, 2012
The acquisition trail in B2B leads to a more integrated footprint through mergers and acquisitions: EMANIO/DiCentral; Liaison and Hubspan; Cleo; 1Sync and SA2 make 1WorldSync.
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The last few months have brought some profound mergers and acquisitions in the B2B and data sync markets. The old market categories seem inadequate to describe where we are going since the companies that own these products are moving beyond stand-alone definitions of EDI, workflow, data harmonizing and Managed File Transfer to solutions that provide enterprise gateways and collaboration platforms.
Liaison Acquires Hubspan
Liaison Technologies, a global provider of secure cloud-based integration and data management services and solutions, acquired Hubspan, a provider of cloud-based business integration solutions. Speaking to Trisha Gross, the CEO of Hubspan, and Bob Renner, CEO of Liaison, about the merger of the two companies, they told me, “We both had a long period of mutual respect; this didn’t happen overnight.” They felt that their companies offered complementary services rather than competing products.
Hubspan was founded in 2000, during the early days of cloud integration. This cloud-based single-instance, multi-tenant integration platform delivered on a subscription basis. Liaison Technologies provides global integration and data management, providing solutions to securely move, transform and manage business information on-premise or in the cloud.
The new company creates a mega-platform for cross-enterprise and through-trading-partner- integration—B2B, Application-to-Application (A2A), Managed File Transfer (MFT), Master Data Management (MDM) and Data Security. This services approach is in contrast to the software and tools approaches offered by other leading integration solutions providers.1 Today, companies are faced with huge challenges as they outsource more of their work. They need standard methods of communication between trading partners on a day-to-day basis. As more systems migrate to the cloud, companies can turn to these cloud-based services to ensure secure data synchronization and workflow.
1SYNC and SA2 now 1WorldSync
Speaking to Nihat Arkan, CEO of the new 1WorldSync, he described the challenges inherent in data sharing between trading partners across the globe and how harmonized information supports B2B traffic and consumer search. That is a new message, as GS1 and the companies they formed have been buried in the standards and compliance world.
But it does make sense to merge it all. After all, data synchronization and harmonizing is a beyond-borders issue, a state of business required to successfully manage the value-adding processes across value chains.
The combined operations have more than 15,000 customers in 40 countries; 1WorldSync data management and data pool solutions are certified for the GS1 Global Data Standardization Network™ (GDSN®). 1WorldSync is a joint venture of GS1 Germany and GS1 US, with, respectively, 40% and 60% share ownership in the new entity.
Why the market should care: Commercializing these services opens up the data to a broader set of systems and users through applications that may require this information. As we move to more trading partner collaborative processes, the old A2A approaches are hugely burdensome to organizations. They stymie workflow, slowing down the supply chain.
ChainLink has often talked about ‘data subscriptions’ and data-as-a-service as more companies move into networked platforms where the platform provider hosts the information. Nagging questions persist about who owns the data and what it will cost to participate. But in areas where data has been provided, in organizations such as ValueCentric, GHX,Terra Technology, Nielsen, this data is provided with the permission of the companies in question.
The ongoing question is—how can small businesses compete or partner with 1WorldSync, because 1WorldSync plans to partner with the larger search engines and application providers?
Cleo Acquired by Globe Equity
You might have missed this one a few months back. Long time player Cleo Communications was acquired by growth equity player Globe Equity Partners. Globe is a new growth equity firm in the world of private equity, founded by a team with in-depth software management and sales expertise. Says CEO of Globe Equity, Mahesh Rajasekharan, “The migration to the cloud, big data analytics and compliance requirements have increased demand for secure managed file transfers in the information-rich industries CLEO serves.” Sumit Garg, a Globe partner and now President of Cleo Communications added, “The environment is right for a strong managed file transfer (MFT) company to get to the next level. We will be making additional investments to enhance the CLEO platforms and expand our support services to meet the growing needs of our customers and partners.”
That sounds like more than a hint of things to come. Again there is the push to broader platforms. What is interesting about Cleo is that they also own an e-fax business. At first I did not understand the importance of this aspect of the business—why fax? But after talking to Cleo and their customers I realized that the major industries still have significant data-information processes that are fed by fax. Not only do they need to be secure, but they are the ‘data entry’ system into government, healthcare and other industries that have thousands of offices (government and municipal services, doctors and clinics, for example).
DiCentral Acquires EMANIO’s Trading Partner and Unite!
This acquisition is a bit of history at this point, but should be included in the growth and acquisition discussion. DiCentral was already growing in dominance in the EDI space, expanding their footprint into the cloud and providing more managed services to their customers, thus easing the trading partner connectivity burden.
Mapping between formats and systems has become more complex—not less. There are many file formats that companies may have to deploy. As companies trade B2B, as well as B2G (government), they may need to deploy multiple formats as well as multiple communication vehicles (VANs, Cloud and MFT). This trading partner translator now called DiUnite, from the EMANIO2 acquisition, allows DiCentral’s customers to better integrate on premise as well as to the cloud, better enabling dynamic business networks (as well as providing more services to both customer bases, post-merger).3
Why is this so important to companies and why should they look for more? Our world is getting more complex. Companies are required to integrate in more ways and to more types of systems and services each year. A great percentage of the work we do is still outside the domain of the operating system and needs to be incorporated into workflows. Who will build all those complex workflows? Who will ensure that we are monitoring, controlling and successfully completing all those trading-partner messages? How will the CIO know that the organization is compliant and that there are no holes in the moat?
These M&As are fascinating to watch since the roll-ups create big players with huge customer bases. No doubt, IBM has been driving down this road for a few years—from webMethods, to Cast Iron, to Sterling Commerce—to create a mega-integration strategy. However, Big Blue, Tibco, and Informatica, with their software and tools approaches and big project teams may not be what certain companies want.
Clearly, there are a lot of options here to contemplate, but we are just at the beginning of how this market will morph in the next few years, making it easier for companies who have to create stable but flexible trading partners connections.
The companies discussed in this article (and their competitors) will continue to thrive, since enterprise software firms are focused on the next release of business functionality—math, reports, analytics,—not on connectivity and collaboration enablers. We need both types of solutions providers in the enterprise.