For all the talk of software as a service (SaaS), only about 30 percent of base applications for the supply chain are currently available in that mode, according to R. Michael Mayoras, chief executive officer of RedPrairie Corp. But that's about to change. Within the next three to 10 years, he said, most apps will be hosted over the internet as Web services, eliminating the need for software installations and updates on the user's premises. Speaking to reporters and analysts at RedPrairie's recent RedShift 2008 user conference in Miami, Fla., Mayoras described some additional changes that have taken place in the supply chain software sector over the past five years. For one, he is seeing heavy demand for transportation and warehouse management tools in Europe. To his surprise, the popularity of labor management apps is picking up there as well, driven perhaps by Europe's traditionally union-oriented culture. On the warehouse management side in particular, RedPrairie is experiencing "a healthy refresh cycle" among customers who last bought systems in the 1990s, in the run-up to the year 2000, and are now looking for new ones that can address the growing complexity of distribution. "People are coming back to the well," Mayoras said.
One question of critical importance to supply chain software vendors is the identity of the executive making key purchasing decisions. In many companies, managers within the lines of business vie for power with those in charge of overall information technology. The former, concerned about depth of functionality, often will favor "best-of-breed" software packages, while the latter tend to gravitate toward larger, "enterprise" vendors which offer a broader menu of applications with fewer features. "We hope it's the line-of-business" making the calls, Mayoras said, although he sees increasing pressure from chief information officers to rely on a smaller number of enterprise vendors. Speaking as the CEO of a best-of-breed provider, he claimed that supply chain processes operate under "a different dynamic" than enterprise-style systems. In any case, a number of RedPrairie customers-Mayoras cited toolmaker The Stanley Works as one-successfully deploy the company's specialized software alongside traditional enterprise resource planning packages, such as those offered by software giant SAP AG. RedPrairie has also been competing "head to head" with SAP for the business of top consumer-goods and food producers, he said.
