XML has a chance to do what no other Web technology preceding it has done: supplant EDI as the preferred means of conducting business-to-business commerce online.
A handful of electronic commerce startups, along with key VAN (value-added network) providers that offer electronic data interchange services, are working on ways to add Extensible Markup Language to their products and services.
These vendors believe the Standard Generalized Markup Language derivative delivers EDI functions in a cheaper, more flexible and more interactive way.
"EDI is like a dead animal just lying there. You are sending dead animals back and forth," said Rusty Gordon, EDI manager at an Illinois manufacturer. "With XML, you have a live, interactive animal doing whiz-bang things."
XML, which provides descriptions for using and storing data, can enable communications between applications in the way that EDI enables mainframes to talk to one another with documents that comply with the ANSI X12 and EDIFACT standards.
Sterling Commerce Inc., in Dublin, Ohio, and General Electric Information Services, in Rockville, Md., are playing active roles in XML projects, working with a CommerceNet task force that is studying ways that EDI and XML can work together, including developing standard XML forms for business transactions such as purchase orders.
IBM Global Services, in Somers, N.Y., is also expected to support XML in its service by the end of the year, officials said.
Meanwhile, e-commerce startups Trade'ex Electronic Commerce Systems Inc. and St. Paul Software are staking their claims on the cutting edge of the technology with products due by year's end. Trade'ex, a Tampa, Fla., company with a suite of business-to-business applications, is developing the Trade'ex Transport Protocol, which creates an encrypted channel, a kind of VPN (virtual private network), using RSA Data Security Inc.'s JSafe tool kit.
Through the VPN, businesses will be able to send XML-based forms that perform the same functions as EDI, said Trade'ex Chief Technology Officer Jared Rodriguez at the Gartner Group Internet and Electronic Commerce Expo here last week.
Also, EDI software maker St. Paul Software is shifting its database storage capabilities over to XML, said officials of the St. Paul, Minn., developer. The switch will make it easier to define where data should go within the enterprise.
The price of doing business over a VAN is often beyond the reach of smaller companies. XML-based transactions, carried through the encrypted tunnels of a VPN, can go over the public network securely for half the price, according to a report by Forrester Research Inc., in Cambridge, Mass.
Still, XML, which is only in a 1.0 release from the World Wide Web Consortium, will be a tough sell to the EDI community.
Even those who, like Gordon, welcome XML are quick to point out that few companies will be willing to readily dump their EDI investments. Moreover, XML alone can't offer the services of a VAN.
Veteran EDI customers have been down this road before. Two years ago, pundits said that Web EDI would replace VANs. It didn't happen. Web EDI copied the existing, batch-loading EDI model, but over the Internet with S/MIME (Secure Multipurpose Internet Mail Extension)-wrapped HTML documents. It was cheaper, but it did not improve on the process and gave little incentive to dump existing systems.
Browning Rockwell, CEO of Horizon Trading Co. Inc., in Washington, relies on EDI for transmitting documentation to his company's clients. He finds a convergence of EDI and XML "intriguing," but warns that a split between an Internet/XML camp and a legacy/EDI camp would be a waste of potential.
Rockwell hopes that CommerceNet will find a way to ensure that XML-based documents can talk with traditional EDI formats, such as the X12 data type.
"There is a lot of promise in [XML]," Rockwell said. "But whether it fulfills its promise is a matter of if and how long it will take to achieve critical mass."
Additional reporting by Brian Hannon