SAGE has acquired many software solutions over the years – including State of the Art in the US in 1998 (MAS 90 and MAS 500). Here is a partial listing of the products that SAGE sells in the US. You will probably recognize the names and may be surprised that they are owned by SAGE:

X3 (Formerly Adonix) – ERP
Accpac – ERP
MAS 90 – ERP
MAS 500 – ERP
Timberline – Construction/Property Management
MIP – Non-Profit
Peachtree – Small Office Accounting
ABRA – HR
BEST FAS – Fixed Assets
Saleslogix – CRM
Many others…

One product that has reached a couple of Short List’s recently in our software selection projects is the SAGE X3 product. This is a multi-national manufacturing focused software solution and is the former Adonix product that was acquired by SAGE in 2005. Adonix was originally developed in France and offers a robust accounting/manufacturing solution. It is interesting to note that the CEO of SAGE is Guy Berruyer who led the French SAGE operation. They also recently installed Pascal Houillon as the CEO of SAGE North America – who also came from the French operation. We think these moves point to a future emphasis on the X3 product at SAGE, and may even lead to X3 becoming the flagship product for SAGE on a worldwide basis.

Basically, Microsoft used LS Retail’s AX retail add-on solution to jump start the development of a “Microsoft” retail software solution. This means that they did not have to start developing a retail system from scratch as the LS Retail product is already based on the Dynamics AX toolset, which is actually a pretty smart move if they want to come to market with a solution quickly. Plus, I am sure that LS Retail was paid a tidy sum to allow Microsoft to use their code for the project, so it is probably a win-win for both sides. The biggest danger to LS Retail would be that Microsoft’s retail product eventually makes their product obsolete, but they must have assessed that in their analysis.

So you can see that while the Microsoft Dynamics AX Retail product is currently in Beta testing with 3 installations, it actually has a much more stable background because of all of the installations that LS Retail has with the software. The main question would be how much modification has been done to the LS Retail code and what additional features were added by Microsoft development? I would imagine that for right now, there are only minor changes to the software and that it is fairly stable as far as beta software goes. However it will be very interesting to see where Microsoft takes the product from here.

Another interesting thing to note is that Microsoft has been positioning the AX product more to the higher end of the market in what we call the Tier 2 and even up to the Tier 1 companies and competing against the likes of Oracle, Lawson, JD Edwards (Oracle), and even SAP on occasion. (See SoftResources Tier Chart at www.softresources.com/software-market-overview) The Microsoft RMS product (which is Microsoft’s current multi-store retail solution with many installations) is focused more on smaller retailers in the tier 4 and tier 3 market. Microsoft claims that Dynamics AX Retail will be able to scale from tier 4  all the way up to tier 1 companies. We will see if they can make the pricing work at both ends of the scale and if they can make it simple enough for the small companies to not be overwhelmed, yet sophisticated enough to handle large retailers complex requirements. Traditionally software vendors have had a hard time making a ”one-size-fits-all” solution.

Here is a quick look at the Microsoft booth at the NRF show 2010 with some of my impressions from the floor of the show. It also includes an interview with the Microsoft ERP Marketing Director Guy Weismantal regarding the strategy for Dynamics AX Retail. Guy describes the plan for general release in summer 2010. When he mentions IP, he means the “Intellectual Property” or code they bought from LS Retail to create the Dynamics AX Retail software.

After further investigation and a conversation with representatives from Microsoft, here is my understanding of the Microsoft POS Roadmap. Please note that this is just my interpretation of their roadmap, so I am not speaking directly for Microsoft on this, but I think I have a good idea about the direction they are headed.

There are 3 retail software products now offered by Microsoft – Microsoft POS 2009; Retail Management System (RMS); and Dynamics AX for Retail.

Microsoft POS 2009 - This product was built from the ground up using the .NET architecture and was released in 3Q 2009. POS 2009 is focused on the low end of the market with retailers that have a SINGLE STORE ONLY. The POS system has no HQ solution and would have to integrate to a financial system on the back end. It was built to compete with Quickbooks and small end POS solutions (of which there are many) on the market.

Microsoft RMS – This is the system that Microsoft acquired a number of years ago and actually has a large number of installations. It handles multi-store environments and is more scalable than POS 2009. However the product does not have an accounting back office and must link to a separate accounting system like Dynamics GP or Sage MAS 500. The system also lacks some of the more advanced retail features like Open to Buy. Microsoft has decided that this product will have a few more years of upgrades and enhancements and will then stop development of new features for the software sometime in the 2012-2014 time period. Microsoft will then begin the process of moving RMS users to the new Dynamics AX Retail product. Microsoft will continue to support the product for years after that because of the large install base, but there is definitely a limit to the lifespan of this product.

Microsoft Dynamics AX Retail – This is where Microsoft is putting their future in the retail industry. Dynamics AX is the former Damgaard Axapta product that was acquired by Microsoft in the 2000-2001 timeframe. It is a very functional ERP software solution that is very flexible. Like many of the other ERP software solutions sold by Microsoft (GP, NAV, SL) there are a number of Independent Software Vendor (ISV) companies that have developed add-ons to the AX product. One of these is LS Retail and they developed a retail add-on to the AX product. In order to develop a core retail solution within AX, Microsoft bought the retail code from LS Retail and has made further modifications and branded the software Dynamics AX Retail. Microsoft is just getting this product off the ground and has 3 beta installs in process. They see this product as a scalable product for retailers with 1 store on up to very large retail chains, that offers full functionality including the back office financials. 

I will be talking more about Microsoft and their strategy soon…

Gemmar System’s International Retail 1 retail management solution targets mid-market Apparel retailers as it’s primary focus of business. Headquartered out of Montreal, Quebec, it has a
customer base of over 200 retail chains of which approximately 75% are Apparel retailers. Around 20% of all clients have a U.S. base of operations. The Retail 1 Suite provides coverage for multi-channel sales activities including catalog and Web store fronts. Gemmar has been around for over 26 years and leverages the Microsoft Technology stack including Web Services.

Company: Gemmar Systems International, Inc.
Product: Retail 1
Year Founded: 1983
Ownership: Private
Target Market: 10 to 200 Stores, 1-20 POS per location. Sweet spot are chains with 30-80 stores.
Verticals: Apparel, General Retail, Sporting Goods (contact vendor for more verticals).
Total Customers: 200 (North America)
Technology: Windows 2007, Database: MS SQL Server 7.0
Hardware Requirements: Non proprietary. Contact vendor for additional hardware specifications.
Strengths/Notable Features: Retail-1 Merchant: Application suite including inventory management, merchandising and Open to Buy capabilities. Full layaway and special order capabilities, multi-level merchandise planning, style/color/size matrix. Business Intelligence with KPI supported in Analytics suite. CRM, AR Analysis. Order Management, Distribution, Warehouse, financials. Interface bridge to MS Dynamics GP. Assortment Planning is future module.
Sales Channel: Direct or via Partner (JD Associates)

We spoke with John Deery who is the owner of JD Associates (the US distributor of Gemmar) to get an update on what is happening with his organization. JD Associates actually sells 3 products – Microsoft RMS (100 installations), RetailPro, (600 installations) and they recently picked up Gemmar. They focus on apparel, footwear, and general retail stores.

Company: Multidev Technologies
Product: ChainDrive (for retail chains)
Year Founded: 1997 (ChainDrive product line developed after this time).
Ownership: Private
Target Market: Retailers with 10 – 300 locations, with sweet spot in the 60-70 store range.
Verticals: POS and back end financials for Apparel, Footwear, Sporting Goods, Jewelry and General Retail/Department Stores.
Total Customers: 120+ companies. Many are multi-site, multi-channel. Approximately half are Apparel retailers.
Technology: Borland Interbase SQL database.
Strengths/Notable Features: Has complete sruite of functionality including financial modules, but can interface to mainstream financials such as MS Dynamics GP or Oracle. Full analytics and performance reporting with KPI’s, graphical dashboard display. Modules/features include Mobile Marketing, CRM, Workforce Management, Operations, Accounting, Merchandising, Multi-dimensional Open to Buy (Planning), Style/Color/Size Matrix, Product Management, Store Budgeting, Warehouse, Wholesale Management and Point of Sale.
Sales Channel: Direct
Other: Also offers StoreDrive for single retail locations. Hardware is available for an all-in-one solution for small retailers.

We caught up with Mark Carter from ChainDrive at the NRF 2010 show and here is the video from that interview.