We pen this commentary from the JDA’s annual Focus customer conference being held this week in Las Vegas.  Supply Chain Matters provided an initial commentary with some general first impressions garnered from day one of the conference, and this commentary comes at the close of day two.

We previously noted the announced strategic shift in JDA’s product strategy over the next five years, being positioned as JDA Cloud. After some further briefings with JDA senior executives, it is the view of Supply Chain Matters is that this strategy is more to do with providing various options for the hosting of JDA applications, coupled with a variety of managed services that can span specific application expertise to full process management.

JDA has been working with these types of models with approximately 100 customers for the past three years.  Senior management indicates that the company’s supply chain functionally oriented customers are seeking more options for implementing more advanced capabilities but seek more options in terms of the value-proposition for IT infrastructure, planning expertise or other required expertise.  Existing customers are obviously interested in the pricing strategy, and JDA management appears to be favoring the classic capital license pricing model, but are quick to point out that subscription based pricing can be supported if that is what customers desire.  Another important clarification was that the platform is not a single instance, multi-tenant architecture because of a strong belief that customers are still favoring defined boundaries in their hosted instance, literally “hermetically sealed”  around the customer’s data.  This is certain to trigger responses from supply chain cloud based competitors.  Another meaningful statement was that over 90 percent of current JDA applications are already enabled for hosting options. Our recommendation to existing JDA customers is to seek clarification as to your supply chain business outcome needs, and contrast that to the specific buying options that JDA will support.

Another takeaway from Focus 2012 is the progress that has made since JDA’s acquisition of i2 Technologies nearly two years ago, Readers may recall our Supply Chain Matters past commentary when the first i2 deal was announced in 2008, JDA indicated that its plans for i2 included a software sales model reflected as a “CD replication” strategy, meaning that potential customers would receive standard, un-customized software.  That was rather significant at the time, since i2 was known for its industry-centric innovation in supply chain technology, and was quickly transitioning to a customized software and service provider with some rather significant customers.  Two years hence, it is clear that JDA has uncovered the need for differentiation and depth that customers require in their supply chain technology. For its part, CEO Hamish points to a four year roadmap related to assimilation of i2, and that the company is just beginning to leverage new innovations resulting from the capabilities that the former i2 provides for JDA.

A final observation is directed at the current customer footprint of JDA. Surprisingly, over 75 percent of JDA’s existing customers stem from manufacturing-centric supply chains vs. retailer-centric supply chains. In our view, the bulk of the conference messaging was directed at challenges in retail and ongoing revolution within online commerce.  JDA needs to not only direct its efforts on the opportunities of retailers and manufacturers coming closer aligned in supply chain capabilities but also focus on the widening gaps among manufacturing companies that are best-in-class in capabilities vs. those that need to close these gaps.

Bob Ferrari