The State of Loren Data Corp Web Services

A Briefing for Analysts

Executive Summary

Composing a neutral preamble for a disruptive service is like walking a tightrope; brevity is always
preferred, but one strives to convey the excitement. Can you feel it yet?

In the very staid world of EDI Communications Services, Loren Data Corp has continually armed
the new guard of B2B innovators. While the established world of Value Added Networks appears to
have stagnated in their EDI communications offerings, Loren Data Corp routinely delivers
innovation and incremental improvements via ECGrid®, an intelligent EDI message routing
network, and ECGridOS, the industry’s only programmable EDI network environment.

Loren Data Corp was founded by Todd Gould in 1987. The company’s first decade of EDI services
included developing the client facing and middleware components of the USAF PX logistics chain,
resulting in one of the first Web-Based EDI applications. ECGrid® Loren’s high-powered EDI
intelligent switching infrastructure, entered production in 2001, and now serves a cadre of
recognizable electronic commerce services providers, including SPS Commerce.

ECGrid® is the commerce network of choice serving the vanguard of cloud-based B2B ventures.
Todd Gould’s vision of ECGrid® as a messaging utility is now fully vindicated, with ECGrid® hosting
16,000 trading partner ID’s, and carrying 7-10% of North American EDI message traffic.

ECGridOS, a 90+ Function Web Services API, is the only Programmable EDI Communications
Network in the industry. ECGrid® and ECGridOS offer pure EDI messaging services, unbundled from
software licenses and value added services. Collectively, Loren Data Corp’s EDI Services lay the
groundwork for a new generation of on-demand B2B providers.

Client Types

Customers of Loren Data Corp are classified as ECGrid® clients, or as ECGridOS (API) developers.
This demarcation continues a sure trend of melting away, as ECGridOS developers increasingly
assume the role of "network services grantors", a model where the developer acts as a franchisee
conveying EDI network services within a geographic region, or a vertical market. ECGridOS
developers may also license API code assets, offered as compatible applications that access
ECGrid. Such an Application marketplace for EDI VAN services is quite an innovation, and the
potential is just being realized.

For example, NetEDI has developed a complete EDI network management application built upon
the API. B2B OEMs and SAAS operators would license such a codebase for integration into a
platform, in order to provision EDI administration and billing interfaces. These are the first turnkey
VAN services available and interoperable at the platform level. In these cases, NetEDI acts as the
VAN operator or grantor of services, backed by Loren Data Corps Infrastructure.

Evolution of Mature Accounts

Long-standing ECGrid clients, such as Covalentworks and SPS commerce, typically access our
services via VPN, yet are in a very real sense beneficiaries of the API. This is because we provide
updates, enhanced functionality, and special account handling features via ECGridOS web services.
Therefore, all LDC clients share in the positive improvements catalyzed by the API. Many have a
stated intent to plan future projects around ECGridOS, or already have developer credentials.

ECGridOS is a Full Internal Production System

As for ECGridOS developers, the first and most important client is Loren Data Corp. We deliver all
new client facing features and management functions using the exact WSDL calls that are made
available to our developers, with only a handful of functions reserved for internal use..

Marquee EDI Entrepreneurs bet their Farms on ECGridOS

The current developer of record is NetEDI. Although NetEDI is a non-domestic reference, they
currently hold the largest code base relying solely on ECGridOS. We expect NetEDI to perform land
office business in the EU. The principals of NetEDI are experienced EDI developers, .Net aces par
excellence, and have delivered on every conceivable B2B and ERP platform.

We are very fortunate to have NetEDI in our developer portfolio. I would highly recommend that
anyone interested in these topics consider NetEDI as a source of industry intelligence, quite apart
from his ECGridOS exposure, for his perspective on the B2B tools sector is penetrating.

We have assigned credentials to a list of developers closing in on a baker's dozen + a good handful
in the pipeline. These speculative prospects run the gamut from OEMs to SAAS 3PL hubs and
automotive vertical SCM. We expect contractual agreements from a subset of these.

Conversion of Accounts
When a prospective developer 'gets it', they are in. Therefore, our contacts with technical
management depends on how CTO's and Tech VPs are positioned.

The conversion from prospect to paid services can be sudden. Particularly in the cloud B2B sector,
where the fight for differentiation seems to be heating up. We expect to hear from ECGridOS
developer account holders (the occasional or dormant) in due time. Their initial intuition is usually
spot on, even if coding efforts are somewhat delayed. The original intent to develop will reassert
itself.

An increasing resource pool of example code, tools, and helpful utilities will serve to awaken some
of our shy developers.

Pure WS vs. Adapters or Both?

Regarding adapters: We feel that current IDEs handle rational WSDL grammars as well as platform
specific adapters. Time allowing, we plan creating a Boomi Atom, a WCF or App Fabric Component
for Biztalk server, and we may throw a dart at other SAAS enabling multi-Tenant platform, such as
Netsuite OS, Mule ESB, or some-such.

Web Services are consumed directly by SAP's xi, ABAP, Sterling Integrator, Biztalk, Visual Studio,
Eclipse, Web Sphere, and other platforms. The creation of specific adapters may only serve to
transform otherwise well documented WS functions into an arbitrary alternative. Clean, unified well
documented WS Calls, or a REST family equivalent (depending on what religion you grew up in),
are far superior to a fragmented set of one off adapters that must keep pace with the quirks and
vagaries of the targeted host system.
ECGridOS Web Services, as currently cast, are fully formed routines that accomplish complete
'jobs', and return rich data from ECGrid's routing and session control process layers.

ECGrid's Advanced Architecture Makes ECGridOS Possible

One reason we feel Loren Data has the lead in EDI API initiatives is that ECGrid is architecturally
more sophisticated than other VANs

Specifically, ECGrid®:

• Has superior State Awareness in message handling,

• Has better adherence to inter-network signaling standards,
• Is better prepared to meet the demands of emerging X12 standards
• Supports a more complete set of message handling, network interconnect, and parcel
manifest metadata
• The only EDI system to offer directory services

Without the foundation of ECGrid, designed from the outset as a network of networks, the API
would be either trivial or ineffective as an infrastructure enabler. I personally posit that the market
leaders do not share ECGrid's internal sophistication, and therefore, the API catchup will be a
formidable challenge. The lead is however, perishable.

Longer term strategies for Enterprise 2.0 mashups with other services and API's: Todd and I
are keen to try and deliver a transparent EDI experience for systems that have open REST APIs for
mid range accounting, such as Freshbooks, Quickbooks on-line, and some of the lightweight ERP
packages such as Compiere. Most of these app providers may require naught but our own
development elbow grease and time.

The opportunity for larger integration vendors to subsume EDI Communications via a
fundamental services approach (like ECGridOS), has not yet taken firm hold in the market.
CastIron systems, for example, should make EDI an in-the-box feature, with a dashboard
configuration panel. Such a tie up would serve CI's clients by obviating the need for external VAN
configuration - a rote and vexing task.

There are many other examples of nascent integration markets that will bear fruit in time as we
build upon accounts, collect use cases, and continue to encourage our seed developers to allow us
to assist them in building a better EDI experience.

Loren Data Corp's Culture

Todd and team have kept marquee accounts such as SPS commerce satisfied by providing a quality
of operational support that is professional, yet non-bureaucratic. The LD Netops team is unlike
other VAN support organizations. The ethos of LD is to model support as an extension of a client's
preferred departmental model, accountable party to accountable party.

A well known axiom in the VAN or ISP business is that when things are working well, Netops is
inconsequential; and when things go horribly wrong, an effective network operations team is
instantly distinguished.

Loren Data Corp is a Mature EDI Carrier, chosen by Cloud B2B Innovators
Loren Data Corp provides critical services to a select class of B2B commerce companies. These
service providers are in the vanguard of delivering on-demand B2B services to all levels of the
supply chain sector, but are singularly accommodating of the SME. This was a triumph of vision on
the part of these bold, B2B services providers. I still puzzle over the SME's abandonment by the
VAN sector leaders.

That such a blind spot persists merely underlines the legacy VAN’s preference of delivering capital
line of business solutions bundled with EDI messaging services. However, the continuing availability
of unbundled EDI message routing services is an absolute necessity for the sector to thrive.

By bringing the ECGridOS API to market, Todd and his team at Loren Data Corp have assured
competitive B2B service providers, particularly Cloud-based operators, that unbundled EDI
messaging services will continue to evolve. The competitive fabric of the B2B sector depends on
just such innovation.