General Electric Co.’s Global Exchange Services business unit announced Monday a broad-ranging extension of its partnership with PriceWaterhouseCoopers LLP, while simultaneously moving to open its proprietary service for business-to-business e-commerce applications to any third-party digital exchange.
The move to open GE’s value-added network (VAN) to third-party exchanges is a calculated effort to leverage the company’s existing relationships with more than 100,000 customers in more than 50 countries that currently rely on EDI technologies to conduct business-to-business e-commerce.
By opening its network to exchanges built around packaged applications that rely on XML, GE’s Global Exchange Services unit, based in Gaithersburg, Md., hopes to position itself as the conduit between emerging marketplace based on XML technologies and existing applications build around EDI and X.12 technologies.
Going forward, GE executives say their network of Java-based services positions them to become a foundation for linking various exchanges to create a new economic model built around exchange-to-exchange integration.
“They have a lot going for them,” said Amy Hedrick, a senior industry analyst with AMR Research Inc. ” The challenge will be how well they execute and only time will tell.”
Although GE’s Global Exchange Services unit has a significant edge in terms of providing a network for business-to-business e-commerce applications that is already used by 60 per cent of the current Fortune 500 companies, rivals such as IBM Corp. and CommerceOne Inc. are building competing networks.
Last year, GE’s Global Exchange Services unit signed an alliance with CommerceOne that links CommerceOne’s e-procurement applications to the GE service. But in terms of the core services offering, the two companies remain competitive.
Meanwhile, the alliance with PWC extends an existing development agreement between the two companies under which PWC has been writing code to link GE’s service to enterprise applications. Today’s agreement extends that alliance to each company’s respective sales force, which are both focused on competing with IBM in this space.
The deal with PWC, along with a similar deal inked with Cap Gemini earlier this month, is part of an effort to recruit new channel partners for the GE service, said Harvey Seegers, business unit president and CEO.
“Up until recently, our strategy has been to go it alone,” Seegers said. “But we have found that we needed a borader vision to penetrate the market more broadly.”
According to Seegers, the core asset of the GE Global Exchange Services unit is its ability to link business partners to a broad number of existing business-to-business networks that are already generating transactions, as opposed to many existing exchanges that have very few transactions.
“It’s been a crazy and confusing year,” said Seegers during the company’s conference here. “It’s been a year of awakening and a year of suffocating.”
Given that climate, Seegers argues that his company is now positioned to become a “liquidity engine” for the more than 400 exchanges that now exist in the market by helping to link these exchanges to each other.
Separately Monday, GE Global Exchange Services announced that Cargill has become the latest Fortune 500 company to sign up for its service and that it has signed software alliances with Ztango Inc. to add wireless support to its service. In addition, it has extended its alliance with Entigo Corp. to incorporate that company’s warranty claims management system.
Ultimately, Seegers said his goal is to eliminate “swivel chair e-commerce” where customers take orders from the Internet an re-enter them into existing enterprise applications.
“Our goal is to help re-engineer business processes and reduce the variation around a business process,” Seegers said.