Business Cloud Technology Booms as Foreclosure Looms for Old Software

Supply chain leaders and communities involved in sourcing, ordering, shipping, receiving and product payment are turning to scaleable network software systems to grow their business.


Here’s the key to valuing global commerce and supply chain technology companies: they are more like real estate than software. They get more valuable over time as they become more populated. They deliver more value to everyone, over time, as they grow. When your neighbor improves his asset, the value of the neighborhood goes up for everyone in the neighborhood. There is a reason why the rent in New York City is more than the rent in Anchorage, Alaska, and the reason is very similar to why Facebook is far more valuable than MySpace—its population and the assets they provide to the community.

When companies evaluate systems for monitoring, controlling and improving commerce and supply chain today, they are still thinking about it as a feature/function solve. It isn’t. They need to be thinking about it as a network solve. Which network is likely to be a New York City kind of network? Which of these systems is most likely to give them the scale and reach and “fast-connect” they need to be truly agile when the world is changing so quickly?

There are no break-away critical mass leaders yet, but there are at least a few who have the right models, and they all share this commonality—they’re cloud-based and collaborative. Cloud is making possible for business what Facebook did for consumers. The notion of a shared, multi-tenant software delivery model that gets deployed across the entire customer base offers better economics for every company involved. When the cost of IT is shared and spread across multiple companies, customers begin to see real benefits. This is called multi-tenancy and it’s the cornerstone of cloud technology.

The world of global commerce and supply chain is prime for this type of cloud model because of the sheer number of partners and suppliers that collaborate to make products. When any one partner modifies its connection to the multi-tenant cloud platform or improves the quality of that connection, it’s done once, in one place, and the change is immediately available to all others invited to be in the network. Conversely, when any company on the network improves a partner connection, it’s improved for all. In other words, if you are on this platform, the stability and value of your integrated solution improves over time not just because of your hard work but also because of the hard work of others. Like real estate, the value of the asset grows when the value of the neighborhood grows.

These are still early days. The market does not yet understand how to evaluate and choose these emerging systems. But sit tight, we’re about to see the Facebooks of the business-to-business information exchange technology world experience a period of booming growth, while the MySpaces fall quickly into foreclosure.

About the Author: Greg Kefer is Director, Corporate Marketing, at GT Nexus in Oakland, Calif. GT Nexus provides a cloud-based collaboration platform to automate hundreds of supply chain processes on a global scale, across entire trade communities. For information, visit www.gtnexus.com.

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