I know that JDA and Red Prairie had focused on slightly different areas of supply chain software: remind me who did what specifically?
JDA was more in the supply chain planning side, particularly for retail, manufacturing and distribution. It helped retailers for example with demand planning and forecasting, for example how a retailer might plan their new season.
Red Prairie was more on the supply chain execution side, and was very strong in warehouse management systems. It helped organisations to manage and run large distribution centres. It is also strong in workforce management, including how to schedule the labour required and manage time and attendance, and payroll. They also did inventory execution technology. Combined, the two companies create the largest supply chain management company with an integrated planning and execution footprint. Red Prairie had revenues of around $400m and JDA revenues of around $700m
You said JDA targeted three key verticals. Was it more-or-less the same for Red Prairie?
Yes, but they also did quite a bit of logistics companies. JDA by the way also has quite a strong business for services companies, in things like hospitality, the cruise industry, healthcare and so on, doing pricing and revenue management.
I read an analyst blog by Retail Systems Research which complained that Red Prairie has been quite acquisitive even before JDA, buying companies such as Blue Cube, StorePerform, Vortex Connect, and that it hasn't finished integrating those yet, let alone starting to integrate with JDA...
To be fair, integrating some of those more recent acquisitions I would say is still 'in flight'. But the key thing now is to create a common platform for both footprints [JDA and Red Prairie] with a modular architecture. Customers don't have to buy everything, it's by module. We'll be announcing a more detailed roadmap in the next couple of months, but the preferred deployment model is definitely going to be cloud. So in the sense that the functionality will be delivered as a service some of the back-end technicalities around integration are less important.
Yes, I understand that JDA was very cloud-oriented already whereas Red Prairie was less so?
Red Prairie was also moving in that direction but the JDA merger will help to accelerate that. But even with JDA, customers have a choice: most applications are web-based and can be deployed in the cloud or inside someone's firewall.
I've also seen some analyst comment that included concerns at how long it will take for JDA to actually get to this integrated, common platform. Announcing a roadmap is only the start...
I think it will be a phased approach to integration. Yes, it will take some time, but the purpose of the roadmap, which we'll announce before our big user conference in Florida in May, is to really detail it out.
Around 300 customers were already customers of both firms. Will customers who were already customers of both companies see harmonised customer contact?
Absolutely, they'll get a single point of contact; we'll be integrating sales and so on.
Who do you see as primary competition: are we talking Oracle, SAP, Epicor?
Yes we compete with the big ERP companies you mentioned who are trying to get more into SCM, and then in different areas we compete with niche applications vendors. There are hundreds of them in different areas and different geographies, but we are clearly a big player with combined revenues of over $1 billion. We're the largest pure-play.
But why would someone come to JDA and not simply take whatever SCM capability their preferred ERP vendor can offer them?
It comes down to how strategic the SCM function is at a particular company. If it's very simplistic and not considered a core competency then maybe they can go with 'just good enough'. Our customers all have an ERP, of course, but they choose us because they can see the value that we bring and the level of advanced capability. If we can't help them generate a differentiator and grow operating margins then we can't justify our own existence. But the way I like to think of it is that if you have heart problems you don't go to a general physician, you go to a cardiologist.