In 2023, most businesses need digital data exchange systems with advanced security protocols.

Electronic Data Interchange (EDI) and Secure File Transfer Protocol (SFTP) are two trusted facets worth discussing in this sector, and businesses across the globe rely on them daily.

In fact, the 2020 B2B Ecommerce Market Report by Digital Commerce 360 showed how, in 2019, EDI accounted for 78.4% (or $7 trillion) of all B2B electronic sales.

The pink half is MINE.

While there was a brief slump post-Covid, the market is still expected to grow at a CAGR of 9.8 from now until 2030 or from $27.93 billion (2022) to $58.98 billion (2030).

As technology evolves, so do elements like EDI and SFTP, adapting to the needs of modern businesses and ensuring that data transfer remains efficient, secure, and reliable.

Trusted names like Cegedim (formerly NetEDI) and Cleo offer reliable EDI over well known protocols like AS2, however, developments in business communication and technology mean newer, more effective solutions are gaining traction.

In this post, we’ll take an exploratory stroll through future trends in EDI and SFTP, offering insights into what businesses, like yours, can anticipate in the coming years.

1. Cloud-based EDI solutions

The shift towards cloud-based solutions is an overarching trend that’s reshaping the EDI ecosystem. These solutions offer unparalleled scalability, flexibility, and cost-effectiveness.

As an example, SFTP To Go combines the scalability, high availability and durability of Amazon S3’s cloud storage services, the security measures of SFTP, and the trusted convenience of EDI.

With products like ours gaining interest, protocol and service combinations such as SFTP To Go and EDI are certainly a trending topic.

Businesses no longer need to fork out hefty capital investments in infrastructure. Instead, they can tap into cloud platforms to adapt super fast to changing requirements, ensuring uninterrupted and efficient data exchange that’s also highly secure.

Me creating the 9th "New Folder" this week (with no name)—just to "stay organized." 

2. Mobile EDI

The ubiquity of phones and tablets has driven the popularity of mobile EDI solutions. These platforms and mobile apps empower users to manage their EDI transactions on the fly. The ability to work on the move keeps businesses agile, responsive, and always connected, irrespective of geographical constraints.

This trend is particularly relevant in the retail sector, where DEX (direct exchange) is expediting supply chain workflows. Delivery workers use DEX to scan barcodes onto tablets or mobile scanners and create electronic invoices.

Then, in-store docks enable transmission of that data to receivers, who open the invoices and scan deliveries to verify transactions. Following verification, invoices are closed and transmitted back to suppliers via mobile EDI systems.

DEX and mobile EDI are having a marked, cost saving impact by lowering delivery times.

Naturally, SFTPs platform and interface is fully mobile responsive, allowing standard operations to continue no matter what device you’re on.

Bleep. Bleep-eeep.

3. EDI-ERP synching

Now here’s a harmonious union of two powerful technological tools, each with its own set of strengths.

At its core, EDI facilitates standardized electronic data interchange between business partners, ensuring that transactional information is communicated efficiently and accurately.

On the other hand, Enterprise Resource Planning (ERP) systems are like the backbone of an organization's operational processes, an axis for managing everything from inventory and procurement to finance and human resources.

When these two systems can be integrated via automated exchange transmission on a platform like SFTP To Go, the benefits are plenty:

  • Streamlined ops: Automated data transfer between EDI and ERP eliminates manual entry, speeding up processes and reducing human error.
  • Unified data management: The integration means consistent and synchronized data across the system, with way less redundancy and discrepancies.
  • Informed decisions: Real-time data exchange empowers you with current information, enabling swift and accurate decisions that benefit your company more.
  • Operational efficiency: Integration means faster transaction processing, reduced errors, and really significant cost savings.
  • Uber-responsiveness: Immediate access to transactional data lets businesses adapt quickly to market changes or supply chain disruptions, without even breaking a sweat.

So, the fusion of EDI and ERP will continue to be adopted, offering a sturdy framework that drives business efficiency, accuracy, and agility.

Me, watching cooking vids in the most random places.

4. Advanced EDI analytics

Data analytics are increasingly being harnessed in contemporary EDI solutions. By analyzing the wealth of your transaction data, your business can derive actionable insights, predict trends, and inform your strategy with fact.

This proactive trend means optimized operations and increased profitability.

As businesses rely more and more on data-driven insights to steer decision-making, the platforms they use for data exchange play a central role—as they define what’s compatible and what’s not.

SFTP To Go, as a fully-managed cloud storage solution, exemplifies this trend by making analytics more accessible, regardless of your chosen tools.

SFTP To Go's design means easy integration with other applications through the use of APIs and webhook notifications. So, businesses can seamlessly funnel their EDI data from SFTP To Go into their analytics tools for accurate real-time insights.

In essence, while advanced EDI analytics focuses on deriving insights from data, platforms like SFTP To Go ensure that this data is securely transmitted, easily accessible, and ready for analysis.

Denying eating my colleage's sandwich for the 5th day in a row.

5. Enhanced EDI security

Cyber threats are no joke in 2023 and beyond, so the need for security of EDI systems couldn’t possibly be more pronounced.

Contemporary solutions are fortified with advanced encryption, multi-factor authentication, and regular security audits.

No holds barred security frameworks ensure the integrity and confidentiality of data, but just what kind of protocols and solutions are we talking about here?

Well, SFTP is a leader in this context, particularly when it’s optimized via a service like SFTP To Go.

1. SFTP will stay relevant

Despite the emergence of newer protocols, SFTP is still highly relevant and is likely to remain so for the foreseeable future.

As the most secure protocol for transferring sensitive data over the internet, SFTP offers integrity and confidentiality for your business, your partners, and your clients.

Its layered security features make it indispensable to businesses that rely on data security, which is most businesses in 2023 and beyond.

Operating over the Secure Shell (SSH) protocol, SFTP ensures that both authentication and data are encrypted. Unlike its predecessor, FTP, which transmits data in plain text, SFTP encrypts it to prevent unauthorized access during transit.

As of 2023, with the exponential growth in cyber threats and data breaches, industries ranging from finance to healthcare prioritize SFTP for its proven track record in safeguarding data integrity and confidentiality.

2. Companies will increasingly rely on SFTP’s superior cryptography

One of SFTP's standout features, and something companies are increasingly relying upon, is SSH’s superior cryptography, including:

  • Public key authentication
  • Advanced cryptographic algorithms

The latter includes, among many others, DH and ECDH key-change algorithms for forward secrecy. This ensures that even if an attacker compromises the private keys of a session, they can’t decrypt past or future sessions.

Without forward secrecy, if an attacker were to compromise a key, they could potentially decrypt vast reams of data, spanning multiple sessions and, potentially, millions of dollars.

However, with forward secrecy in place, the security breach is isolated and only applicable to the state of the system and the dollars in play for the specific session breached.

As notable as this security feature is, this is just a miniscule part of the broader cryptographic framework that SSH/SFTP offers.

As the imperative for data security amplifies, we should anticipate advances or enhancements to the foundational SSH protocol, including the integration of MFA or multi-factor authentication and passkey support.

Passkeys, where the system generates a one-time code for authentication, ensures that even on the odd chance that a malicious actor intercepts the code, they won’t be able to use it for future sessions.

3. SFTP vs. other protocols

SFTP's superiority over other protocols like FTPS stems from its foundational design.

FTPS and similar protocols retrofit security into older and inherently insecure protocols. Conversely, SFTP was built from the ground up with the SSH protocol, meaning that every aspect of the data transfer, from authentication to actual transmission is encrypted and secure.

While SSL/TLS-based protocols can be configured to provide additional security, it's not always guaranteed, but it is guaranteed with SFTP.

SFTP also operates over a single port, to streamline firewall configuration and reduce potential entry points for attacks. Protocols like FTPS require multiple ports, complex firewall setups, and present a variety of potential and proven vulnerabilities.

Another alternative to SFTP is SCP, which offers some unique features, like recursive However, SCP is now considered obsolete and is supposedly being rewritten to work on top of SFTP.

SFTP’s advanced built-in security mechanisms are the primary reason why it remains the preferred choice for secure data transfers, even in the face of newer protocols.

Plus, with inclusive platforms like SFTP To Go gaining speed, added layers of data safety, scalability, and reliability are added to the process of business data sharing, storage, and exchange.

Me, talking passionately about lunch at the most random times.

4. Rising adoption of SFTP

The combination of simplicity and robust security has driven a surge in SFTP adoption across various sectors, including government, healthcare, and finance.

The larger business partner is usually the one who calls the shots about whether to use EDI and AS2 or SFTP. Since larger companies generally have more to lose, the security level of SFTP is seen as a big plus, with simplicity really sealing the deal—anyone can use SFTP, even less experienced IT personnel.

For instance, financial institutions rely on SFTP for exchanging sensitive documents, while healthcare entities use it for transmitting confidential patient data.

Its enduring relevance is highlighted by its widespread adoption in regulatory-compliant environments, where data security is not just a preference but a mandate.

Merging the powers of EDI and SFTP

In terms of data exchange, this combination has consistently proved its value: Electronic Data Interchange (EDI) and Secure File Transfer Protocol (SFTP).

Individually, each has its strengths. EDI is all about standardizing and streamlining business-to-business communications, while SFTP shines for its secure data transfer capabilities and its overall simplicity.

Their synergy offers businesses unparalleled advantages, providing an holistic solution that addresses both the functional and security aspects of data transfer.

And it’s not just about combining two technologies, but creating a cohesive system that amplifies the strengths of each, ensuring that businesses can transmit data seamlessly without compromising on security or compliance.

Future applications of EDI and SFTP

As we wade deeper into the weird waters of the twenty-twenties, the fusion of EDI and SFTP is poised to address all manner of emerging challenges and opportunities.

The combination of standardized data exchange and secure transmission is setting the stage for several innovative applications.

Here's a glimpse into the future use cases of this power couple:

1. Smart supply chain management:

With the continued rise and proliferation of the Internet of Things (IoT) and connected devices, real-time data exchange is everything.

The EDI-SFTP combination will facilitate instantaneous, secure data transfers between manufacturers, suppliers, and retailers, allowing for smarter inventory management, predictive restocking, and seamless order fulfillment.

2. Healthcare data interoperability:

As healthcare systems globally move towards more integrated models, there will be an increasing need for secure and standardized data exchange.

EDI will ensure that patient data, medical records, and prescriptions are standardized, while SFTP will guarantee the secure transmission of this sensitive information between healthcare providers.

3. Financial services revolution:

The financial sector is seeing rapid digitization.

Future applications might include real-time cross-border transactions, where the EDI standardizes transaction data, and SFTP ensures it's securely transmitted across global networks, reducing transaction times and errors.

4. Smart cities and infrastructure:

Cities are becoming smarter, so there will be a growing need for secure data exchange (including things like massive video file transfers, etc.) between vast entities and networks like utilities, transportation systems, and municipal services.

SFTP and similar technologies will help ensure efficient and secure data flow, leading to optimized urban services and improved quality of life.

5. Retail and e-commerce evolution:

The future of retail is pointing to hyper-personalization and real-time responsiveness.

While EDI has typically been associated solely with B2B communications, the trend indicates its growing relevance in B2C (business-to-consumer) scenarios—in the context of enhancing retail and e-commerce experiences for consumers through personalized customer recommendations, discounts, promotions, loyalty and marketing campaigns based on the timely and secure sharing of customer data.

EDI will standardize customer data, purchase histories, and preferences, along with data from IoT devices, while SFTP will ensure that this data is securely shared between retailers, warehouses, and third-party logistics providers, meaning super-personalized shopping experiences and always on-time deliveries.

6. Sustainable energy management:

As the world necessarily shifts towards renewable energy sources, we’ll need real-time data exchange between energy grids, storage solutions, and consumers.

EDI will standardize energy consumption and production data on a global stage, while SFTP will ensure its secure transmission.

So, EDI and SFTP will even play their part in optimized energy distribution and reduced wastage.

SFTP To Go and the future

Beyond 2023, the combined power of standardized data exchange and secure transmission will facilitate a wealth of new and innovative solutions to contemporary problems.

The trajectory of EDI and SFTP is one of continuous innovation and refinement. By staying ahead of these trends and adapting accordingly, businesses can ensure they remain at the pinnacle of secure and efficient data exchange.

This combination is at the heart of SFTP To Go. Our platform not only aligns with the latest trends in EDI and SFTP but enhances them, ensuring our clients always have a competitive edge.

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Frequently Asked Questions

What role does EDI play in B2B sales?

In 2019, EDI contributed to 78.4% ($7 trillion) of all B2B electronic transactions. Its significance is projected to grow steadily from 2022 to 2030.

Which trends are shaping the future of EDI?

Noteworthy advancements include: Transition to cloud platforms, Introduction of mobile EDI platforms, Merging with ERP systems for enhanced operations, Embracing deeper data analytics, Strengthened security measures.

Why is SFTP a preferred choice for data transfer?

SFTP offers strong encryption and security features, making it a reliable option for safeguarding sensitive data during transit, especially amid rising cyber concerns.

How does SFTP stand against emerging protocols?

While there are newer protocols like FTPS and HTTPS, SFTP's inherent security attributes, including encryption and forward secrecy, solidify its position as a top choice for secure data transfers.

What potential applications can the EDI and SFTP union bring?

The combined strengths of EDI and SFTP can pave the way for innovations in smart supply chains, healthcare data sharing, financial transactions, urban infrastructure management, e-commerce dynamics, and sustainable energy distribution.