Midrange Stuff, OS/400 Edition

EXE Technologies, once the dominant vendor of warehouse management software for many Fortune 100 companies, is lowering its aim a notch and targeting its software sales efforts, for the first time, at small and midsized businesses (SMBs) in North America. The company has streamlined its implementation methodologies and enacted aggressive pricing in hopes of luring smaller businesses that could benefit from advanced supply chain software, but have had trouble justifying the high cost.

EXE started its SMB push from its Dallas headquarters about six months ago, and it has already completed several deals, says Jeff Perry, an EXE vice president. "We're moving down in the market in North America, but we've been in that market overseas for some time," Perry said. "It's clearly new for us in the States."

The products EXE is selling in its SMB push include two of its warehouse management systems--EXceed 4000 and EXceed 1000--and its demand forecasting and replenishment product, Adaptive Inventory Manager. The company is also selling its COBOL-based OS/400 software, EXceed 400i, which it ported from the mainframe two years ago. The Adaptive Inventory Manager product does not run on OS/400. The third core warehousing application, EXceed 2000, is designed for high-volume organizations and is mostly installed by grocery chains.

While smaller companies can benefit from the sophisticated inventory, shipping, and collaborative capabilities that EXE has traditionally provided to larger enterprises, such as Safeway and Coca-Cola, smaller companies have different requirements when it comes to pricing and implementation. "The products are pretty much the same, but we've repackaged and recalibrated them, from a pricing perspective, and fine tuned the implementation," Perry says.

For example, while a company with a million-square-foot warehouse and 1,000 employees needs to track its inventory as effectively as, say, a company with 20 employees and a 50,000-square-foot warehouse, the software needs to be less complicated to install at the smaller company. "We've stripped away some of the overhead" with the new SMB products, Perry says.

EXE has put together a small sales force to target the SMB market. Over the next year, these salespeople will take on new responsibilities as the company moves to an indirect sales model, in which certified partners and resellers are the primary interface to the customers. EXE is in the process of identifying and certifying its partners, and should be ready to announce them by the end of the quarter, Perry says.

In the last year, much attention has been paid to the so-called "SMB opportunity." Many large software companies, like SAP and Siebel Systems, have identified the SMB space (companies with less than $1 billion in annual revenues) as the most promising space for increasing revenue growth.

For EXE, however, success in the SMB space is as much about survival as anything else. The company has fallen on hard times since 1999, when it was considered by AMR Research to be the largest of the pure-play warehouse management software vendors. Since 2000, however, when EXE reported revenues of $115 million, much of the momentum in the warehousing software space has gone to EXE's rival, Manhattan Associates, which has earned the praise of analyst groups like AMR Research for its continued growth and execution.

But EXE is making moves to get back on its feet and resume growth. Along with the new focus on the SMB market, the company's board has shaken up the ranks of the company's top executives. Joe Cowan, who has more than 30 years of experience, including stints at enterprise software vendors Wonderware and Baan, took the helm as the company's new president and CEO. Cowan replaced Ray Hood, who continues as EXE's chairman, while Ken Powell, who was president and chief operating officer, has resigned.