SCDigest editor Dan Gilmore had the chance recently to do a phone interview with interim JDA Software CEO Bal Dail, who replaced long-time CEO Hamish Brewer in May over concerns that company wasn't moving fast enough relative to a new strategic plan.
Bail is a partner at New Mountain Capital, a private equity company that now owns JDA after orchestrating a merger in late 2012 between JDA and RedPrairie, which New Mountain controlled at the time of the deal.
We ran part 1 of that interview last week. (See Interim JDA CEO Bal Dail on Where the Company is Headed in 2014 and Beyond Part 1.).
Below is an annotated version of the second half of that discussion, which again cover a lot of ground. If you want to know where JDA is headed, you will certainly be interested in this entire discussion.
Gilmore: I am very interested in this question. When JDA acquired i2, you inherited customers and solutions in a number of markets that are outside of your core consumer goods-to-retail sector. The high tech industry is one obvious example, but also some in the metals industry and other more industrial types of customers. To be honest, coming out of your Focus user conference, I am not clear which of these other sectors outside of consumer goods and retail are still important to JDA. What is your thinking?
Dail: Most of these other sectors, such automotive, other industrial sectors, and of course high tech are still very important to us. Not only are we active in these areas, we have signed some deals very recently, or expanded our footprint in some of these types of companies such as Chrysler and Continental Tire, so we are actually seeing some good traction.
We have dedicated sales personnel focused on these industries, and we are increasing our marketing investment there. For example, we are sponsoring an industry forum coming up in Detroit, so the attention is definitely there.
Gilmore: The ERP providers - notably SAP and Oracle - continue of course to be major competition to companies such as JDA. What is your sense of where things stand now in the ERP wars?
Dail: There is a certain amount of what you might call "coopetition" between ourselves and the ERP providers. We are obviously competing, but on most implementations we have to work with them too.
Right now, based on some of the announcements SAP has recently made about support of the current APO platform [its current supply chain planning suite], we are seeing some increase in the number of APO replacement opportunities. Some customers are saying "Is Hana [SAP's new in-memory computing platform that will be the foundation of its next generation of planning solutions] really going to work?" That is creating some opportunity for us.
Oracle we see a lot in TMS deals and in retail. We think we have some real advantages versus Oracle in the overall planning space, and in WMS.
Our ability to deploy in the Cloud is also helping us here versus ERP.
Gilmore: Speaking of the Cloud, when Hamish Brewer made the big Cloud push at Focus in 2012, I asked him if that also meant a switch to more of a subscription pricing model, the way most Cloud offerings are priced. He was quite emphatic, actually, that JDA would primarily push the traditional upfront license model with Cloud delivery. JDA was a public company at the time, which of course many have influenced that position. JDA is now a private company - are you more interested today today in that subscription-based, recurring revenue financial model?
Dail: As a public entity, you have different pressures, and the analysts that follow you are looking for year-over-year comparisons, so that sort of financial transition is a lot tougher.
The bias we have now - myself and our senior leadership - is we want to accommodate our customers. For some customers, the preferred arrangement is the traditional license approach, and for other customers they are shifting the way they consume technology and buy technology, and so if a subscription type deal is what they want, we'll accommodate that.
What we're trying to do is make sure we are listening to the customer, again back to the voice of the customer thinking. If a customer says a traditional license model doesn't work for me, I want to go to more of a subscription based model, a Cloud model, then we'll do that.
(Supply Chain Trends and Issues Article - Continued Below)