The whirlwind Spring event season is finally starting to wind down…sort of. Most recently I was in San Francisco attending the Anaplan user conference at the Fairmont. Not a bad location to spend a few days. Although I will say the hallways remind me a bit of the movie The Shining. Over the past year, Anaplan has emerged as one of Silicon Valley’s unicorns. With a valuation over $1billion and a large cash infusion earlier in 2016, the pressure and expectations are mounting. Rightfully so, their ambitions appear to be on par – to become the de facto planning platform. In essence they are looking to replace the old workhorse known as Microsoft Excel. Talk about an ambitious and lofty goal.
Anaplan plays in a host of functional areas, ranging from finance and human resources to sales and supply chain (more on the last later) and in a range of industries from financial services to CPG. Their underlying technology allows these businesses to create the planning models and apps required to manage their operations, in many cases taking Excel spreadsheets head on. As Anaplan’s CMO Grant Halloran stated from main stage – Excel has spread like a virus. I don’t think he meant that in a positive way! But the reality is the tool has been on our desktops for decades, its simplicity and lack of a comparable cross industry platform has made it ubiquitous. Because of this it has spread like a virus. And for all its shortcomings it does work. Is it the most robust planning tool out there? No. But sometimes good enough is better than perfect. So does Anaplan have a chance? Their momentum suggests it does, particular for large use cases where Excel has simply withered under the sheer volume of data, complexity of the process, or both. Let’s focus on one area they have invested heavily in over the past 2 years – supply chain.
Gunning for an icon.
First of all, supply chain means a lot of things to a lot of people. While I believe it goes beyond factories and warehouses, the outer boundaries of what supply chain management is remains a moving target. A clear opportunity for Anaplan – but one that will require both focus and execution, as well as making some hard decisions as to what to ignore. Where does the company continue to invest? Do they want to focus on complex planning around bill of materials and sourcing, does it make more sense to focus on demand planning or do they lean on their work with financial planning and look at the sales & operations planning (S&OP) space? They already have an impressive list of customers in the space headlined by the likes of Diageo and Del Monte. Of course these spaces have some entrenched players that Anaplan has been competing against and scoring some wins. However, to continue to build on these successes they need to continue to bolster their supply chain talent across the board, evolve their strategy, and most importantly, keep building the use case library that demonstrates their ability to address supply chain issues.
The challenge for Anaplan remains that their brand is not fully established within the supply chain space. That can be both an opportunity – being the fresh face in the space – but also a challenge – where is your street cred? Supply chain professionals are fickle, they want to know that you have experience and use cases that are tightly aligned with their needs. But nothing ventured, nothing gained!
There is clearly the desire from the top management at Anaplan. As a unicorn with cash, they should have both the resources and cool factor to continue to attract the appropriate talent to make this vision a reality. But the road is full of grizzled veterans and many have tried to displace Excel. I have joked with colleagues that had Microsoft branded itself as a supply chain vendor they would be the #1 vendor, thanks to Excel. Go bold or go home seems to be the name of the game these days, clearly Anaplan is looking to do so. Maybe the new kid has what the grizzled veterans didn’t – the right technology.
For another view of the event please read my colleague Doug Henschen’s piece – click here.
Around this time last year Aptos and their leadership team were still under the Epicor banner, after close to a year as an independent firm Aptos hosted their first user conference. Fortunately for me I was able to head back to Las Vegas for the fourth time in 6 weeks – this time I didn’t test my luck at the blackjack tables. Being in Las Vegas seemed to be appropriate as the investment firm Apax Partners is gambling on Aptos and their leadership team to be successful in a very competitive retail landscape. Time will tell if the gamble will pay off…but first some reactions to the conference:
- It is about the people – at the end of the day, regardless of what business you are in, people buy from people. Maybe one day when bots have taken over they will purchase from each other and we will be left to fend off Skynet. Not only do we buy from other people, but the biggest driver for happy employees are the people we work with and for. Aptos is taking a refreshing take on this, emphasizing the importance of culture and people. The investors in Aptos took to main stage to reinforce this, stating that they were making an investment in the business but also the leaders, from CEO Noel Goggin on down. Noel also emphasized the importance in the team he has built to manage the growth and opportunity for Aptos. This focus on the people is refreshing…and at the end of the day business is about people working with and dealing with other people.
- Leaning on a legacy of cloud – the cloud is no longer an enigma but is firmly entrenched as the preferred vehicle to deliver software. Not simply because it lowers the total cost of ownership (TCO) but today it is starting to show its true business value. Allowing for retailers and others to quickly scale whether in terms of product growth of geographical expansion. A number of the customers we visited such as Tory Burch, Michael Kors and Nike were looking to Aptos to help empower their global expansions – this was made easier due to the cloud-based solution. Other retailers such as Tumi were looking to lean on the cloud-based solution to have a much more dynamic and flexible inventory system. Truly tying together their inventory whether in the store, storage room or distribution center. The cloud is here, the cloud is the preferred vehicle for product and the cloud allows greater business value.
- Further up to the customer or further back into supply chain? So where can Aptos go from here? Granted they have plenty of opportunity within their existing client base as well as closing net new opportunities. But is there a play for Aptos to push further back into the stack and provide their customers with greater views in the sourcing and manufacturing portion of their supply chain? Or move even deeper to the omni-channel needs of the consumer, building on their acquisition of ShopVisible, placing a bigger bet on eCommerce world where the likes of Demandware are present? They have shown an ability to build out the necessary assets, for example QuantiSense brining more powerful analytics to their portfolio. This will provide even greater insights into the customer demands. For Aptos to truly reach its potential we feel they will need to think through some of these strategies, whether they partner or develop their own solutions that is up to Noel and his team to figure out.
Thankfully what happens in Vegas isn’t staying in Vegas for Aptos. They come of out of a successful user event with the wind at their backs. Noel and the team have carved out a nice space to play in. However there are many fierce competitors out there, their honeymoon period is long over. The team is in place and with some strong customer stories it is up to Aptos to step up and really push their story.
If you were to place a bet, Aptos seems to have some favorable odds. But as we all know, nothing in Las Vegas is a sure thing!
I just came back from Nashville, well actually Las Vegas but was in Nashville to start the week. The JDA Focus 2016 event was being held in the Music City. It brought together a large gathering of some of the top supply chain professionals from the around the globe. Per usual, JDA put on a good show, at least the first day since that was what I was able to attend! But even being in Nashville for less than 24 hours, I took away some observations from the event and JDA:
- Talking a good game – The main stage presentations by CEO Bal Dail and Chief Revenue Office Razat Guarav were in stark contrast to the former administrations. How? Much more focused on the disruptors facing the market and with a keen eye on the future. Bal focused on the company embarking in a “big pivot” focusing on how customers are impacting our businesses. While Razat hit on the major disruptors that face supply chains and our industries. More on both later. What was refreshing was a message from main stage that called out and hit on many of the trends and drivers that we are all facing. Both Bal and Razat also started giving the audience a glimpse into how JDA will address these shifts, whether it is the new retail.me offering, greater emphasis on JDA labs or creating a digital hub, all promising efforts to address their customers’ needs. Coupling their willingness to address new disruptors head on coupled with solutions that are poised to take on these changes was refreshing to hear from this leadership team, not always what would come from main stage.
- Facing disruptors…and making the pivot – One of the big threads that we at Constellation Research have been working on with our customers were reflected on main stage in Nashville (as much as I would like to take credit for those ideas…alas I cannot). Razat hit on 5 big themes of disruption: mobile, IoT, social, cloud and big data. We speak at length about these disruptors; feel free to read our research, but what is the biggest underlying driver is the rise of the consumer. Many of these disruptors have empowered the consumer, given the consumer a growing voice in the ecosystem. When it comes to the supply chain whether you are B2B or B2C the consumer has become the driver – your business must make this the center of their strategy. The same goes for the technology providers that are servicing these businesses. Bal and his team have a great challenge ahead as they look to pivot themselves to help their customers’ better address the consumers and the disruptors that have made chaos the new norm.
- So where does JDA go from here? So JDA is painting a picture of awareness and willingness to pivot to meet their customers’ needs. Good. But what does the future hold for JDA? Over the past decade the company has absorbed Manugistics, i2 Technologies and Red Prairie. All were best of breed supply chain solution providers. JDA became, on paper, a supply chain powerhouse being able to address a wide array of industry needs. Ranging from process and discrete manufacturing, retail and logistics. Impressive. But the question remains – what does New Mountain Capital have in mind long term for this asset? While other supply chain players have been focusing their efforts on specific industries – players like Plex focused on manufacturing, Aptos being spun off from Epicor to focus on retail while Epicor can concentrate on ERP. Can JDA continue to find success competing on all fronts? Or do they need to consider following a similar strategy as Epicor and break up the parts? Maybe the pieces competing on their own are more powerful than the whole? I do not believe this is the only direction JDA can take, but at some point New Mountain Capital will want to reap the rewards from their investment. How that happens will be interesting to observe.
JDA remains a major player in the field of supply chain. The leadership and culture have an aggressive level of expectations of themselves and the business – it is now up to the solutions and software to catch up. They are clearly aware and in tune with the disruptors that are impacting all businesses. The next few months will be crucial for the JDA leadership team to implement their pivot strategy and find success.
Disclosure – I worked at i2 Technologies from 2004 to 2009, i2 Technologies was acquired by JDA in 2009.