Best-of-Breed Software Lives!
Posted by: Steve Hamm on November 03, 2005
Oracle Corp. CEO Larry Ellison has been the high priest of consolidation in the software industry. His pitch: customers want a few large software makers that offer them a wide array of products and services. They don’t want to mess with a bunch of small fry. That made all the more interesting something that happened at Oracle’s recent briefing for analysts in New York. Mike Jones, CIO of electronics retailer Circuit City and a major Oracle software customer, made a presentation that, in part, extolled the virtues of dealing with a handful of major tech suppliers. However, when he put up a slide listing Circuit City’s strategic tech partners, it included StreamServe, a $50 million privately held software company. Looks like there’s still a role for the so-called best-of-breed software company.
On the surface, StreamServe doesn't seem like much to get excited about. It's an eight-year-old company that started in Sweden to format printing jobs for big Unix computing systems. Boor-ing. But, over the years, the company has beefed up its capabilitites and now fills a vital niche in a corporate world were communications skills are at a premium. Chris Stone, a former Novell vice-chairman who came to StreamServe six months ago, has positioned the company as a "document presentment" business. It takes information that resides in all sorts of applications--from financial managment, to pricing, to inventory controls--and packages it for publication via a printer, e-mail, Web portal, or even a cell phone. "It's the 'last mile' of enterprise computing. It's how you present what you do," says Stone. StreamServe has 4000 customers, mostly in Europe, but is now making a major marketing push in the United States
Here's how it helps Circuit City: The retailer was losing out to Best Buy. One reason: Pricing was out of control. Each store had its own computing system for pricing items and printing out display labels containing all the important info: model, manufacturer, SKU, price. Circuit City hired the tech team of IBM, Oracle, and StreamServe to create a centralized inventory and pricing system for the whole chain. Now decisions about inventories and pricing are made centrally, and the chain can quickly change prices to respond to the competition or launch its own promotions. StreamServe's software gathers the info, sets it up graphically, and prepares for printing.
It's doing some cool stuff in Europe. For Daimler-Chrysler, the company prints out promotional messages on letters and notices the automaker sends to customers. For instance, a person who leases a car might get a notice that their lease is about to expire, and, on the same page, see a color picture of a new car they might be interested in leasing.
Is this niche big enough to build a cluster of companies around? Not clear. The challenge for StreamServe and a handful of small companies it competes with is to keep innovating rapidly--making it difficult for larger software companies to simply add what they do to a larger package as a feature. Best-of-breed status will matter only they keep doing what they do a lot better than behemoths like Oracle.