Budding B2B standard faces problems

A data standard created to act as a high-tech lubricant for the exchange of customer information is facing problems, including a just-announced review by the U.S. Federal Trade Commission (FTC) and, perhaps more important, a lack of big end-user acceptance so far.

The Customer Profile Exchange standard, or CPExchange, offers companies a way around numerous data types and the custom-designed interfaces needed to translate them. If the standard doesn’t take off, the process may not improve, proponents say.

“At this point, we do data exchanges that are disastrous. Everybody speaks a different language; everybody has ways of pushing information – from text files to XML. It is very, very nasty,” said Henri Asseily, chief technology officer at Los Angeles-based BizRate.com Inc., a company that provides customer-generated ratings of e-commerce sites and one of 70 companies that is a member of the CPExchange Network.

No Takers Yet

The first version of CPExchange was published in October, but so far, no company has adopted it. Most of its backers are vendors, with IBM being the largest. Only a few major end-user companies were involved in the standard’s development, and two of those companies have apparently distanced themselves from this effort: First Union Corp. in Charlotte, N.C., and Charles Schwab & Co. in San Francisco. Both companies say they have no plans to implement the standard.

Asseily said he believes the standard can solve the data exchange problems, but the 127-page specification is “so complicated that it’s very, very difficult for companies to make heads or tails of it.”

He said he doesn’t know if the standard will win adoption. “Things that fly are simple things,” Asseily noted.

Winning end-user support for a new standard can be difficult in any case. But how will this standard fare if it’s put under the spotlight of the FTC and Congress?

The FTC announced earlier this month that it will hold a workshop on March 13 on the potential data privacy issues raised by company-to-company exchanges of customer information, prompted in part by a letter from Sen. Richard C. Shelby (R-Ala.). Shelby claims that the CPExchange technology gives companies a “vastly improved ability to share and exploit personal information in pursuit of profit.”

Protecting Private Data

That very public attention on the standard could be keeping end users away.

“It makes it more difficult [to win adoption], no question. On the other hand, it also raises the issue on people’s radar,” said Matthew Doering, CTO at QueryObject Systems Corp. in Roslyn Heights, N.Y., a developer of business intelligence software and a member of CPExchange network.

Moreover, the marketing of the standard has just begun.

To succeed, the standard will need to be adopted by a big end user, said Doug Laney, vice president of application delivery strategies at Meta Group Inc. in Stamford, Conn. He’s cautiously optimistic that that will happen.

“I know that standards defined by committee that aren’t developed at a grassroots level typically don’t fly without some heavy, heavy marketing or visible support from a large organization,” said Laney.

Lack of Marketing

But obvious potential early adopters – the members of the CPExchange – have clearly stepped back. A spokesman for Charles Schwab said it was just a “fluke” that the firm was listed as a member of the CPExchange; the company had joined to pick up some XML tips. A First Union spokeswoman downplayed her firm’s involvement. A third major end user listed on the network, BarnesandNoble.com Inc., didn’t respond by press time.

A major selling point for proponents of the CPExchange is the standard’s ability to incorporate an individual’s privacy preferences. For instance, a company that needs to transmit consumer data to a supplier could attach privacy restrictions that set limits on the use of the data, such as third party sharing.

“The main purpose of the standard is to provide a safe way to ethically pass consumer profile information between companies,” said Doering.

But privacy advocates worry that companies can “just ignore” the permission features of the standard “and use the vastly greater facility for exchanging personal information,” said Jason Catlett, president of Junkbusters Corp., a privacy advocacy firm in Green Brook, N.J.