By Allan Maurer
ATLANTA – Most old-model merchandising software companies offer products built on technology that is one or two decades old and is sold requiring expensive up front license fees, which is why the product offered by Predictix as software as a service is disruptive, says Rafael Gonzalez Caloni, the executive vice president of marketing.
Founded in 2005, the 80 person company is bootstrapped. It took seed money from its founders and has run on revenues ever since, Caloni says. “We’re not looking for venture funding,” he says. “We’ve had a good run to date, growing consistently.
Caloni says the Predictix software suite helps retail companies make better decisions across various company disciplines.
The company’s founders, he notes, “Are guys who have been there and done that” in the retail marketing space and decided to do it again with modern technology that would entirely change the business model.
The company is selling its product to Tier 1 retailers with 6,000 stores or 700 supermarkets and doing it internationally.
Predictix designed and continually enhances its products to help retailers and brands make better business decisions, from choosing the right merchandise assortment for each store to strategically pricing, promoting, and replenishing products.
The Predictix suite tackles all the tough decision-making problems retailers face rather than just planning, pricing, space or other single segments, Caloni says.
“They’re all tough problems, so older products focused on one. No one tried to bring them all together before. Yet they belong together. Your pricing affects your placement, they all have ripple effects you have to take into account.”
Another problem with older software, Caloni points out, is that “Business changes all the time, especially in retailing these days.” The Predictix software adapts to changing conditions. “In traditional environments, spreadsheets start popping up like mushrooms around your applications.”
The Predictix suite, however, “Adapts the applications to the business so you don’t have to change code every time the business changes.”
Offering the Predictix suite via a SaaS model is helping the company continue to gain traction. “We believe this is a long term trend. Cloud and SaaS business models are compelling, especially in this economy, where people are focused on how to do more with less. That’s accelerating the trend.
“So we’ve changed the table stakes for investing in our model.” Clients spend about three months with the company up front setting up the software, but can have an application up and running within about three weeks. “We implement it over months, but within weeks they have a good sense of how it will work for them without spending a lot of time or investing much money up front,” says Caloni.
Traditionally, older products involve “Bake-offs with vendors, an investment of multiple millions of dollars and 2.5 years to implement the technology,” he adds.
The dramatic difference in the table stakes make it easier for Predictix to move forward even in the current market, he says. “If we don’t provide value to our clients, they can just turn the system off.”
Molham Aref, CEO, Predictix said in a previous news release, “They know they’re getting our best effort 100 percent of the time, because if we don’t deliver value or constantly improve our solutions, they can simply walk away.”
In June, analyst firm Gartner evaluated its consumer-centric merchandising suite in the report, “Predictix Shows Promise With a Software-as-a-Service Merchandise Planning Suite,” written by analysts Hung LeHong and Mim Burt and published June 10, 2009.
The company currently has about eight clients and expects to bring in several more in coming months. Current clients include Delia’s, which has 100 stores, a leading grocer, and a global apparel brand.
Online: www.predictix.com
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