Has anyone here taken a look at QADI ---MFG/PRO---
I thought that this artical might be of interest
THIS ARTICLE IS FROM AMR NOVEMBER 21, 1997
QAD Unveils New Product Plans in Annual Briefing
No one at AMR could accuse QAD of wearing out its welcome.
The newly public ERP vendor rarely visits more than once a
year. And every visit is filled with interesting insights.
QAD is one of the few companies that spans the ERP market
from the Fortune 100 to sub-$250M manufacturers. At the
high end, its products are often deployed as plant-centric
solutions (20% of the 100 largest manufacturers are
customers). Increasingly, QAD software is found connected
to an SAP backbone (TSI's Mercator is emerging as the
linkage tool of choice). In fact, several AMR clients have
raved about the success of using SAP's R/3 financials and
QAD's MFG/PRO together. QAD also reports similar success
interfacing with financial applications from Oracle,
PeopleSoft, and CODA.
While the sweet spot for "wall-to-wall" solutions continues
to be the midrange ERP market, the company is pushing to
move down market as well. It has signed 10 distributors in
North America to companies in the $50M to $250M range.
This is starting to pay off: In the quarter just ended,
the new distributor base contributed $4M in revenue.
QAD now has over 1,900 customers and 3,600 sites. The
company was one of the first to move to a strict vertical
focus (the sales organization is arranged by vertical, not
territory), and remains committed to its five core
segments: Electronics/Industrial (more than half of the
base), Food & Beverage (more than 400 sites), Consumer
Packaged Goods, Automotive, and Medical (growing at 300%).
During our meeting, company executives rattled off a list
of impressive wins in the recent quarter (including
Gillette, Philips, United Biscuits, Avon, Meritor, Lucas
Varity/Kelsey-Hays, Tower Automotive, and Prince/Johnson
Controls). Two items caught our attention. First, the
recent wins include several takeaways from larger ERP
vendors. Second, 43% of the deals to date are from first-
time QAD customers. This is a very impressive figure.
On the product side, QAD continues to invest the bulk of
its development spending on MFG/PRO. The ERP suite now
numbers 47 modules. Of these, about one-third are for
vertical-specific enhancements in its core markets. One
interesting twist is the company's focus on leveraging
teams of customers to fund additional development.
QAD is betting that Java will become the user interface
standard and is developing Java front-ends to complement
its current Windows clients and character displays (QAD
cannot get customers to give up "green screens" for certain
applications). More and more of these clients will be
connected to NT servers running Oracle (available now) and
SQL Server (in development, but not announced).
In terms of new products, QAD is slowly taking the covers
off of On/Q, a comprehensive order fulfillment suite. On/Q
is being developed with six key customers drawn primarily
from the Food & Beverage/Consumer Goods markets. The
software is designed to include complex order processing,
commodities management, contract management, pricing and
promotional planning and management, route scheduling,
real-time Available to Promise, and much more. On/Q is in
limited beta now. Look for a major product launch early
next year.
As for performance, Wall Street is looking for QAD to top
$175M in annual revenues. Viewed against the larger ERP
vendors, this number is a bit misleading as AD has
traditionally generated most of its revenues from licenses
(65%) and very little from services (with services
representing only 5% of revenues, QAD is the model of the
"software factory"). The company argued convincingly that
its market leverage is much higher. Each dollar of QAD
revenue pulls in another $5-6 in revenue for distributors,
hardware and database suppliers, and complementary tools
and applications.
As a result of the IPO, QAD now has an additional $100M in
the bank. We probed for possible acquisitions,
particularly in the Advanced Planning and Scheduling (APS)
or Customer Asset Management (CAM) markets, but were told
that any likely purchases would be focused on buying
channels.
One other point stressed by QAD was the hiring of senior
sales and marketing executives. At the risk of repeating
ourselves, QAD has a great story that should be told. We
believe that by adding marketing and merchandising skills
to its strong heritage of product innovation and customer
support, QAD should could easily be a $500M company by the
end of FY2001. Oh well, if the company does not take our
advice this time, we can always repeat it after the annual
visit next year. |
