Dick, how do you see the current state of the software provider industry, and particularly in the EDI realm?
Raman: We have a vision that companies need to work electronically in order to be competitive. In fact, keeping virtual is part of our tag line. Our roots are in EDI, but we have changed our tune dramatically with regard to moving our services toward virtualization.
I've seen references to the virtual supply chain in your literature. Please explain how this fits your plan.
Raman: We sell a service that helps create digital content for supply chain management, and also for the marketing side of our customers' operations. It is part of our effort to enable a single source of the truth. Marketing is as much a part of the supply chain as order processing. We help customers aggregate, validate, and synchronize their data with their trading partners.
We suggest our customers do the same for their marketing as they do in their supply chain.
What areas do you see as in need of improvement with regard to the more effective use of electronic processing?
Raman: There are lots of small to medium size companies that do business on the internet, but still have significant manual processing after the order. There is plenty of demand for their products, but they can't process orders electronically. And if you can't process electronically, then you can't keep up with demand. Online companies should look at what the traditional companies are doing in the supply chain, and that means using EDI type links. Using the combined electronic processes, we can squeeze costs from the supply chain more effectively.
This can make online companies more virtual. And of course, the inverse is true for traditional companies who might be able to move some of their marketing efforts online.
TIE Commerce has sold software applications historically. How do you see the change to online, or SaaS services?
Raman: SaaS is coming in as the way forward. Any small or medium sized company would be out of their mind to buy software when they can get the same or better functionality online. SaaS is a much better way for smaller companies to get very sophisticated applications at very small costs. And this is what we are offering.
Do you see this trend mainly from new customers, or are existing customers asking to change?
Raman: We have an increasing number of customers wanting to move to the SaaS model. They see this as a way for them to increase functionality without having to devote a lot of time and effort. We help their EDI stream, and add new streams with their new customers who are coming through the internet. They understand that they need to fix their information first, and to standardize their content. This is the synchronization of their data between their marketing and order processing that I mentioned earlier.
As a company, how are you managing the conversion from software vendor to SaaS provider?
Raman: For us, it's a juggling act. Traditionally, we have operated under the license model where we get revenue up front. But moving to the SaaS model, we rely on revenue from a 36 month contract. We have to make sure we deliver the services right so we can collect our revenue over time.
I believe SaaS is the best way to go for both us and for our customers. In the end, when the the last people have converted to doing business over the internet, this will be the very best way to do business.
Do you see any roadblocks to converting your customers to SaaS?
Raman: It's still a struggle for some. There continues to be significant fear, uncertainty, and doubt, particularly among companies set in traditional ways of doing business for many years. But I think the sensation of extra revenue will have them open to the internet. We want ot keep our current model working and help customers convert to SaaS.
For TIE Commerce, we will keep our traditional customers in the traditional mode until they are comfortable changing. We have a good mix of SaaS and traditional revenue.