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VAI Explains Its (Quiet) Success in a Hotly Contested ERP Market -- Part 2

Written By: Predrag Jakovljevic
Published On: September 10 2012



Part 1 of this blog series introduced VAI (Vormittag Associates Inc.) -- an award winning software developer and an IBM Premier Business Partner. For more information, also see VAI’s profile in TEC’s Directory here.

The article described both the vendor’s genesis since its founding in 1978 and its current state of affairs. Part 2 will feature my recent conversation with VAI’s top management team.



VAI Executives Strut Their Stuff
PJ: What has been your secret sauce, and how have you managed to remain independent since 1978 (in light of many larger and once better known peers having since been acquired)?

VAI: VAI is a privately owned, family run business, with non-family members serving in key executive and management positions. This structure plays very well with the mid-market customers that we serve who require a high level of personalized support and service.

Consolidators are very visible in the enterprise resource planning (ERP) market, and many are run by public financial management teams. As a result, people with financial backgrounds run a software company, with a focus on growing the company financially through acquisition. This results in purchasing/owning multiple software solutions, many of which duplicate each other in scope but make the “bottom line” look bigger due to the increased customer base.

As part of a larger organization, the overall size of these companies individually may appear larger, but the actual number of employees dedicated to supporting each of the individual software packages or divisions usually remains the same as in the original company before the acquisition. Many times the employee base shrinks due to this “growth” process, which has a negative impact on customer service and support of the individual software packages now owned. Consistency and continued advancement for the multiple software solutions tends to suffer as well. The larger public company can lose focus on long-term development and definition of software roadmap or direction in favor of short term financial gain.

These factors have contributed greatly to VAI's continued success. VAI is a profitable business and is not encumbered by debt. The company is focused on developing the highest quality software that is based on real life customer requirements and best practices. The S2K software is very intuitive and easy to use, and the product is cost effective to implement and easy to manage. In addition, the S2K price point and diverse suite of applications offer tremendous value to VAI’s customers, and the staff has a tremendous amount of knowledge and experience.

VAI’s competitive landscape is among the commonly known competitors. Beginning in the late 90s, VAI’s research and development (R&D) cycle has been year-round, enabling VAI to stay at the forefront of innovation. VAI's competitive advantage comes from a team that has a great deal of experience in implementing the S2K solutions. With well more than half of the employees employed with the company 10 years or more, VAI offers a tremendous amount of knowledge in the best practices of its diverse client base.

The team brings this unparalleled level of experience to their customers, thereby helping to ensure the rapid and successful implementation of the S2K products. In addition, VAI has the ability to custom tailor its solutions to the customers’ exact business requirements. This greatly enhances the use of the S2K software and the benefits for the customer, giving them an advantage over their competitors.

PJ: As an independent software vendor (ISV), what do you like best about the IBM Power Systems platform?

VAI: The IBM Power System platform is ideal for the mid-market. These businesses typically have the same advanced requirements as large enterprise business but do not have unlimited budgets or a large IT staff. Partnering IBM and IBM Power Systems means implementing proven solutions on a platform you can trust. By choosing the latest IBM Power Systems platform, businesses get world-class performance plus dynamic infrastructure flexibility, with the opportunity to lower monthly operations costs. With the Power Systems platform, IBM develops, fully tests and preloads the core middleware components together upfront, whereas on other platforms, operating system, database and middleware integration is done in the data center.

The pre-integration and testing is a key factor in enabling companies to deploy applications faster and maintain them with fewer staff. Virtualization and workload management are also built into the platform to enable businesses to run multiple applications and components together on the same system, driving up system utilization and delivering a better return on IT investments. The bottom line is that the reliability, scalability, and security of the IBM Power Systems platform is unmatched and it is an ideal server for mid-market businesses focused on growth.

PJWhat trends in buying behavior (any hurdles and/or drivers) have you noticed in the market recently?

VAI: Sales Force Automation (SFA), Customer Relationship Management (CRM), and Business Intelligence (BI) are highly sought products right now. Customers can increase sales and improve customer service with S2K Sales Force (in the SFA / CRM realm), which are great tools to help their sales teams manage prospects and customers in an organized and proactive way.

For its part, S2K Analytics, VAI’s BI tool, provides users with capabilities such as a dashboard view of important business data. It allows users to easily examine key areas of their business so they can make quicker and smarter business decisions. Cost is always a hurdle in deploying any solution, but the return on investment (ROI) for these products can be easily demonstrated.

PJ: What percentage of your current install base is in the true multi-tenant cloud, and has that become a factor in selections?

VAI: Mid-size businesses have been more cautious in adopting software as a service (SaaS) for mission-critical ERP applications. Therefore, on premises versus SaaS has not been a significant selection factor. The concern over reliability and the security of their data still exists for many businesses. VAI offers multi-tenant and virtualized environments for its SaaS customers, with an install base under 10 percent.

PJ: Why are you that excited about the S2K 5.4 release being browser-based (i.e., why is that a big deal, given that almost every ERP product is now web enabled)?

VAI: With S2K 5.4, VAI can now offer its customers the ability to launch S2K using either a Microsoft Windows client or within a browser. Today, many devices are not Windows-based. With S2K 5.4, the user can now launch S2K from any device with a browser, i.e., Apple, Android, etc. In addition, by having S2K browser-based we can now leverage IBM WebSphere Portal to provide the user with a true “Role Based” interface where the content, applications, and dashboards have all been tailored for the specific user and are all deployed through the browser. We see this as the future of ERP computing.

PJ: What were the major highlights in 2011 (customer, partner, and functionality-wise), and what do you expect for 2012 and after, regarding demand for your solutions across different territories, industries, and product lines/modules?

VAI: Some of VAI’s major customer wins and installs include companies such as Handy HardwareMSCOImperial Bag and Paper Company, and J. Polep Distribution Services. These wins plus many others have fueled VAI’s growth and its continued success as a leading ERP solution for the mid-market. In addition, VAI’s new products (S2K Sales Force and S2K Analytics) have been very well received in the market by new accounts as well as the existing install base and we are seeing new customers purchasing these applications with almost every ERP sale.

As the 2012 IBM Beacon Award Winner for Outstanding Solution for Midsized Businesses, VAI is seeing continued growth and success in 2012. Achieving this prestigious award is a tremendous honor for VAI as it supports the company’s unwavering goal of providing the most advanced, flexible, and highly customizable business solutions for the mid-market.

PJ: Is there anything you are at liberty to volunteer on the company's future moves, i.e., new functional scope, new verticals, regions, etc.? Or simply, is there anything you would like to add?

VAI: The 2012 VAI User Conference is being held this October, at The Cosmopolitan, Las Vegas (see here for more details). This event will bring together VAI and IBM experts to show VAI customers and prospects how they can achieve stronger business benefits from their IT investments. VAI will demonstrate how it will work together with customers to redefine their IT infrastructure, enabling them to adapt to change, reduce costs, and gain the efficiencies needed to take their business to the next level.

Dear readers, what are your comments, thoughts, suggestions or individual experiences with VAI’s products? What do you think of the company’s strategy and related moves, and do you think that the cutthroat ERP software market can accommodate focused smaller vendors like VAI in the long run?

 
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