January 15, 2009
NRF: Around the Fringes
By Bill Bittner, President,
BWH Consulting
My tour around the outskirts
of the NRF show floor this year produced some interesting findings. My
basic goal was to walk the fringes and talk to some of the vendors in their
10×10 booths to see what they were offering. I focused on technology
vendors and found everything from special terminals meant to be used by
POS integrators for building a POS platforms platform,
to full service business intelligence applications offered as services
delivered over the Internet (SaaS). I have included links to each
of their websites and encourage you to visit ones that seem interesting.
DirectEDI brings web-based SaaS to EDI with
a service that provides customers full data conversion and works with both
suppliers and buyers to support Electronic Data Interchange. Using
DirectEDI unloads the responsibility for training new users and getting
them online to the EDI vendor so the supplier or buyer can focus on their
manufacturing or retail businesses.
1010Data offers business intelligence using
SaaS to host and report on large databases built from detailed transaction
files. They had been focused on other industries and have now developed
templates for retail market basket analysis that can provide retailers
pre-formatted reports while also quickly answering ad-hoc inquiries.
Chetu manages offshore software development
projects for retailers and distributors and also offers services in business
intelligence. They can be used to develop new software, integrate
packages, or make modifications to packages.
TeleTech maintains an infrastructure that
integrates a distributed staff of technicians into a work-at-home support
service. TeleTech recruits, trains, and schedules support staff so
that workers are vetted for subject area knowledge and then connected to
the central service number over the phone network.
SafeNet provides a unique approach to meeting
network security issues. They offer software that encrypts all the
data that is stored in databases or transmitted across the network. The
fundamental theory is that even if someone is able to gain access to your
wireless network, they won’t be able to understand what they are listening
to. This meets the PCI DSS standard for data at rest and in motion.
Countwise offers TV cameras with embedded
software to detect human beings. These can be used to count people
entering the business, standing in queue or occupying a defined area. Knowing
how many are in line has always been a quandary of store operations. Cameras
that also have detection software can convert activity into statistics
that can be monitored to ensure management objectives are being met.
Discussion Questions:
What contribution are you seeing from today’s small and start-up tech
vendors? Is innovation still alive and well?
Author’s comment: From
a technology perspective, I was impressed with the number of small providers
that have embraced SaaS. As you think about it, this makes sense. The
Software as a Service business model exposes small entrepreneurs to the
whole world of internet users. Boutique developers can focus on specific
business problems to develop optimal solutions that they are willing to
customize for each customer’s requirements and capabilities. We have
come full circle from the initial days of Apple and Microsoft to the large
enterprises and now back to the small developer. Just as garage bands
are competing with the big acts, these developers are going to compete
with the large software houses to provide solutions.
This doesn’t
necessarily present an easy choice for the retailer CIO. On one hand,
the cost of solutions should come down considerably, but the risk of putting
your whole data warehouse project in the hands of a couple guys operating
from their garage seems significant. SaaS is here to stay and the smart
CIO will figure out ways to exploit it. They need to support parallel
implementations that allow them to test multiple solutions. This
means the retailer retains the transaction data that drives various solutions
and can change service providers when the need arises.
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Discussion Questions
Poll
I’m very impressed with Revionics, a small start-up tech vendor providing a predominantly SaaS supermarket price optimization system for the “overlooked.” That is, they’re all about premium-level price optimization services for smaller supermarket chains who can’t afford the big guys (you know who you are, “Big D”). To me, smaller supermarket chains and independent ad groups need to be looking to services like Revionics while using the ARTS Blueprint to make their bidnesses more efficient on small budgets. And while you’re at it, small grocers, make sure your IT suppliers focus their efforts more on selling stuff than on controlling costs. It’s proven to be the surest path to growth.
Innovation is definitely alive and well. The issue that a lot of these start ups have is they are usually started by the tech guy. Brilliant guys that love the tech stuff but don’t have the acumen for sales and marketing. For them to get traction they need to 1) realize their inadequacies and 2) hire or partner with that kind of strength. It will also be hard to get traction from the analyst because many don’t look at companies below $20 million. With that said, there are tremendous advantages to these companies, one they are extremely agile and flexible. Two, you could be a large fish in a small pond which is good for a long-term partnership, and the cost of ownership is reasonable.
Another point that the CIO will be looking at is that many of the legacy companies–big companies–have antiquated platforms and the code is mushrooming to large proportions and they are unwilling to invest in a complete rewrite. If the software was developed 10 years ago, technology has really changed in 10 years and the system is burdened with a lot of old code that today would be faster, easier to learn and much, much more flexible.
Suffice to say, new startups are worth the look! Just protect yourself and know what you are doing for a long term viable relationship.
Three things have put road blocks up for start-up companies with innovative ideas:
1. Investing
Not much money these days for start-up companies. There is also a poor track record in the retail space going back to the $100MM lost at VideOcart.
2. Lack of Sales Support
The industry is slow to support new ideas. A great example is the amount of money that is still spent on paper coupons and the antiquated redemption process. Technology has existed for years to improve this process.
3. “You can’t beat Big Business”
Every time a new company does start to get some traction the 800 LB gorilla’s sweep in and steal the idea or reduce their cost structure to “hurt” the new player. There are lots of examples on this one.
I’d venture to say that the large majority of genuine innovations I have learned about in retail solutions have originated within smaller tech firms. Not all the companies in the short list accompanying this article are actually “garage” startups, but why quibble? The point is well-taken anyway.
The widening acceptance of software as a service (SaaS) as a delivery method for mission-critical applications is a trend that’s worthy of note. Yes this business model provides a smooth on-ramp for software innovators, since it lowers the sales hurdle considerably. It’s also a lower-risk way for client companies to add sophisticated tech capabilities without large commitments to infrastructure and staffing.
Contrast that with the “big iron” and massive consulting requirements of traditional software delivery. Web-delivered and SaaS applications will tend to drive down costs and make more tools available faster to more decision-makers in more organizations. The next few years will favor portals over reports; decision dashboards over post-performance reviews; business intelligence and management by exception over boiling the ocean.
I was struck with not only the number of SAAS vendors, but the interest in SAAS from CIOs. CIOs like the short implementation cycle and the ability to get out if the service isn’t working for them. I’d place bets on all of these vendors.
Innovation is alive and well…and growing. Innovation and technology does not depend on good or bad times. Instead it feeds on itself and ideas. The continued growth of our markets, and the new ways of how we can increase productivity, communication and their impact on our lives will continue to evolve, albeit at an increasing rate. The incredible advances that we have seen in the last 5 years compared to the previous 10-20 are examples of this. Retail, the human behavior and different ways to approach these problems are just examples of these.
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I’m very impressed with Revionics, a small start-up tech vendor providing a predominantly SaaS supermarket price optimization system for the “overlooked.” That is, they’re all about premium-level price optimization services for smaller supermarket chains who can’t afford the big guys (you know who you are, “Big D”). To me, smaller supermarket chains and independent ad groups need to be looking to services like Revionics while using the ARTS Blueprint to make their bidnesses more efficient on small budgets. And while you’re at it, small grocers, make sure your IT suppliers focus their efforts more on selling stuff than on controlling costs. It’s proven to be the surest path to growth.
Innovation is definitely alive and well. The issue that a lot of these start ups have is they are usually started by the tech guy. Brilliant guys that love the tech stuff but don’t have the acumen for sales and marketing. For them to get traction they need to 1) realize their inadequacies and 2) hire or partner with that kind of strength. It will also be hard to get traction from the analyst because many don’t look at companies below $20 million. With that said, there are tremendous advantages to these companies, one they are extremely agile and flexible. Two, you could be a large fish in a small pond which is good for a long-term partnership, and the cost of ownership is reasonable.
Another point that the CIO will be looking at is that many of the legacy companies–big companies–have antiquated platforms and the code is mushrooming to large proportions and they are unwilling to invest in a complete rewrite. If the software was developed 10 years ago, technology has really changed in 10 years and the system is burdened with a lot of old code that today would be faster, easier to learn and much, much more flexible.
Suffice to say, new startups are worth the look! Just protect yourself and know what you are doing for a long term viable relationship.
Three things have put road blocks up for start-up companies with innovative ideas:
1. Investing
Not much money these days for start-up companies. There is also a poor track record in the retail space going back to the $100MM lost at VideOcart.
2. Lack of Sales Support
The industry is slow to support new ideas. A great example is the amount of money that is still spent on paper coupons and the antiquated redemption process. Technology has existed for years to improve this process.
3. “You can’t beat Big Business”
Every time a new company does start to get some traction the 800 LB gorilla’s sweep in and steal the idea or reduce their cost structure to “hurt” the new player. There are lots of examples on this one.
I’d venture to say that the large majority of genuine innovations I have learned about in retail solutions have originated within smaller tech firms. Not all the companies in the short list accompanying this article are actually “garage” startups, but why quibble? The point is well-taken anyway.
The widening acceptance of software as a service (SaaS) as a delivery method for mission-critical applications is a trend that’s worthy of note. Yes this business model provides a smooth on-ramp for software innovators, since it lowers the sales hurdle considerably. It’s also a lower-risk way for client companies to add sophisticated tech capabilities without large commitments to infrastructure and staffing.
Contrast that with the “big iron” and massive consulting requirements of traditional software delivery. Web-delivered and SaaS applications will tend to drive down costs and make more tools available faster to more decision-makers in more organizations. The next few years will favor portals over reports; decision dashboards over post-performance reviews; business intelligence and management by exception over boiling the ocean.
I was struck with not only the number of SAAS vendors, but the interest in SAAS from CIOs. CIOs like the short implementation cycle and the ability to get out if the service isn’t working for them. I’d place bets on all of these vendors.
Innovation is alive and well…and growing. Innovation and technology does not depend on good or bad times. Instead it feeds on itself and ideas. The continued growth of our markets, and the new ways of how we can increase productivity, communication and their impact on our lives will continue to evolve, albeit at an increasing rate. The incredible advances that we have seen in the last 5 years compared to the previous 10-20 are examples of this. Retail, the human behavior and different ways to approach these problems are just examples of these.