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