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Logility Signs First ASP Deal with ebaseOne

Written By: Steve McVey
Published On: February 2 2000

Logility Signs First ASP Deal with ebaseOne
S. McVey - February 2nd, 2000

Event Summary

Collaborative supply chain solution vendor, Logility, recently partnered with ebaseOne, which will use its ASP infrastructure to deploy Logility's supply chain management applications to customers. The deal is the first in what is expected to be several partnerships with ASPs for supporting Logility's i-Connection announced last July. Logility's Value Chain Solutions will be offered as part of OneServ, ebaseOne's solution for small to mid-sized companies.

Market Impact

Logility has achieved an impressive 33% total revenue growth over the past five years, demonstrating that it can still compete effectively in a supply chain management market dominated by much larger players. It sells its planning and execution solutions to mid market companies primarily within the process manufacturing industries, such as food & beverage, chemicals, but also consumer packaged goods and apparel. Logility claims to be happy with its current rate of growth, but is also aggressively targeting the application hosting market. EbaseOne, the first partner to be selected by Logility, offers applications for a flat monthly fee in the core areas of customer relationship management, sales force automation, marketing management, financial management, procurement, human resources, e-business, supply chain management, electronic document management, business intelligence, and office productivity. Hosted applications offer smaller companies the benefits of automated business processes without the large initial costs and support overhead associated with traditionally installed applications. Many other enterprise application vendors are forging relationships with ASPs to more easily deploy their mid market offerings and make them more attractive to budget constrained IT departments. A recent example is JD Edwards' partnership with MCI WorldCom for hosting services.

The partnership with ebaseOne has at least one factor in its favor. Logility's Value Chain Solutions can deliver a competent solution with relatively little customization for companies with straightforward business processes and small, self-contained organizations. Such characteristics are typical for many small to mid-sized companies. A potential risk concerns ebaseOne, which has operated as an ASP for barely a quarter (since November 1999). In its last fiscal year, it posted losses in excess of $2 million, over three times greater than its revenues at roughly $650,000 .

User Recommendations

Small to mid-sized companies should take a closer look at the web-based versions of Logility's suite offered through ebaseOne, but will want to ask the following questions.

1. Does OneServ allow integration to applications that are not part of ebaseOne's offering, such as online trading networks?

2. Does ebaseOne have more application providers in the pipeline for partnerships to provide revenues for the fledgling company?

3. Will ebaseOne allow clients to move the applications in-house in the event they no longer want to subscribe to use them?

 
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