Monthly Archives: June 2010

Applying RIA and Web to the Extended Supply Chain

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Enterprise RIA adoption is growing. It helps businesses become more efficient and grow. It helps entire business ecosystems to work better together by applying modern information technology. Isn’t this what Business Technology is about?

I had in recent days further interaction with Extendas, in relation with their Flower Office project (mentioned in my post The Extended Enterprise – from vision to reality with Rich Internet Application technology). I was able to get additional details about the solution and its reach – all the way from the horn of Africa to the heart of Europe.

This is a great illustration of what can be accomplished with modern business technology and how it brings its benefits also to the developing economies.

FlowerOffice Portal  implements an Enterprise RIA solution from a joint venture of Extendas  (ISV specializing in ecommerce solutions and Dutch market leader in Petrol ERP) and Van Delft International (one of the leading suppliers of cut flowers in the Netherlands and award winning early adopter of mobile software technology).

The FlowerOffice Portal application spans the entire supply chain from flower growers from all over the world to the FloraHolland exchange through the flower trader (such as Van Delft) and finally to wholesalers or even flower shops.

This is an Enterprise Class application, requiring a rich user interaction and transactional capability that is beyond browser based applications. Implemented with uniPaaS, the application is available simply via a URL and login credentials.

The flower supply chain starts with Flower Growers. These supply their flowers to brokers who trade on the flower exchange. Flower wholesalers buy those flowers from the brokers, resell them to retailers and Flowers Shops.

So far, the Flower Exchange was computerized and accessible to ERP systems used by the brokers, and the trade with Growers and Shops was mostly done over the phone.

Flowersoffice has such an ERP system at its core, which is now extended with an Enterprise RIA applications targeted at the edges of the supply chain – the Flower Growers and Flower Shops. These access the application via a portal and can directly enter their data, which is updated in real time. It actually enables a flower shop to get a quote of the current price for a specific flower lot and place an order directly, without further human intervention. This reduces several steps in the process, adding value across the chain, all the way to the end-consumer.

The present beta test focuses on the rose trade, and involves a dozen farmers from Kenya and Ethiopia, FJ Zandbergen (Dutch flower broker) , Delft International (Dutch flower broker and wholeseller) and a few flowers shops.  Once released, it is expected to be used by some 1500 flower shops, streamlining the short-lived flower trade, accelerating logistics and reducing overhead.

Your thoughts? I’m also interested to know about similar experiences.

How to survive the dark side of Cloud Computing

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The last couple of weeks were rich with meetings and discussions about SOA, RIA and Cloud, in between the Forrester IT Forum in the US and the SOA Forum in Switzerland. What strikes me is the “lemming behavior” of a lot of software vendors who decorate their offering with Cloud and XaaS feathers, oblivious of the revenue precipice that aTransition to a Cloud related revenue modelwaits them right ahead.

I have touched upon this subject in my article on RIA and Cloud Computing Apps, as well as in a blog post last year (The coming out of the hybrid SaaS model). It’s ripe for an update.

What we have seen in the last couple of years is an increasing offer of Infrastructure As A Service (IaaS) providing quite elastic on-demand pricing, and an increasing number of software vendors using such infrastructure to offer Cloud hosted applications. The evolution of IaaS technologies facilitates the deployment of traditional on-premise applications over the Cloud, and tempts their vendors to slap on those “Cloud Feathers”. What seems to be put aside are the business model implications.

What the pure SaaS vendors (such as Salesforce.com) experience is a growing pressure of SaaS users towards more granular pricing – real pay per use and not only flat subscriptions. And sooner or later we will see this becoming more and more available. The consequence is a further reduction of software usage costs for customers, and by implication lower revenue per user for the vendor. Vendors will try to compensate by looking for cost reductions – both in developing and maintaining the software and in deploying it. So how can software vendors make money and increase shareholder value in such conditions? They would have to look for more productive and cost efficient software platforms, and implement new business models that tap into the entire ecosystem for shared revenue. And they should be prepared for a very tough transition, which might become fatal.

I recently came across a comment by a Magic Software shareholder that “the licensing model is difficult to understand and costly compared to other tools many of which do not even have licensing models. (this makes MGIC less attractive to potential new developers)”. What is perceived by the commentator as a limitation is in fact one of the bright spots which gives this company a much better position in the growing Cloud market. Magic software already creates most of its revenue using a shared revenue model – tapping into its ecosystem for shared revenues with its customers and partners. It gives the company a very robust outlook and resilience to the upcoming shift in the software business model.

I’m looking forward for your opinions.