SAP plans to buy out Crossgate, a business-to-business electronic data exchange service that allows trading partners to securely transmit critical business information, including production orders, specifications and invoices. Financial terms of the deal were not disclosed.
Crossgate, which was founded in 2001 and is based in Munich, Germany, allows enterprises to set up dedicated secure data links with trading partners, clients and suppliers regardless of their IT capabilities. Crossgate's service currently enables 40,000 business partners in many different industries to security exchange documents and data, according to SAP.
Electronic data exchanges have been used for many years, even before the explosive growth of the Internet in the 1990s, to provide a secure data exchange channel between trading partners. Electronic data exchanges are often used by major manufacturers-such as auto makers, aircraft builders and defense industries-that need to exchange massive amounts of data with an army of suppliers.
While the Internet has helped simplify the implementation of electronic data exchanges, these systems are used in supply chain and trading applications that transmit a huge volume of data. These applications are used when casual links over email or through Web applications are neither secure nor reliable enough to handle the traffic volume.
Through this acquisition, SAP will be able to integrate the Crossgate electronic data exchange with SAP's portfolio of enterprise resource planning (ERP) applications. The Crossgate offering includes e-invoicing services that cover the entire process of inbound and outbound invoices, including signatures and compliance monitoring that can be integrated with customers' back-end systems and finance processes, according to SAP.
"Companies live in an evolving global network of customers and partners, and technology from Crossgate allows them to interact in new ways at the enterprise level the same way that social networking has transformed the way people interact as individuals," Peter Maier, general manager and head of Line of Business Solutions at SAP AG, said in a statement.
"By acquiring Crossgate's highly differentiated solution, we help our customers extend their end-to-end business processes running on SAP to their customers and partners. As a result, thousands of SAP customers will join the network to exchange information easier, execute transactions faster and collaborate better," the statement said.
SAP became a minority investor in Crossgate in 2008. Soon after that, SAP signed a reseller agreement to market the Crossgate B2B Content Engine as the SAP Information Interchange Application by Crossgate. More recently, SAP agreed to resell the SAP E-Invoicing for Compliance application by Crossgate, which allows companies to send and receive digitally signed PDFs or electronic data interchange invoices.
In his statement about SAP's acquisition of his company, Stefan Tittel, Crossgate's CEO and founder, suggested that electronic data exchange will take on aspects of social networking through business applications that let trading partners build relationships.
"With combined social network paradigms and service extensions of business applications, SAP and Crossgate now have the potential to change the face of business networks and deliver a new level of collaboration to SAP customers and their business network partners," Tittel said in his statement. "Our executive management team is excited about the possibility of bringing the Crossgate mission to the next level together with SAP. Our customers will experience business networking that is simple, compelling and efficient."