By Darin Painter, editor-in-chief, PS Magazine
The buzz during PSDA’s P2P Technology + Innovation Summit in New Orleans was the deal between e-Quantum Inc. and DemandBridge, the industry’s largest two software companies. The new company retains the DemandBridge name.
Since October 5, when the companies issued this joint press release, many distributors who rely on either system for client storefronts, e-commerce tools, digital asset management and back-end operations have expressed a mix of hope and concern. Their main question: What does the news mean for their company, and when will effects begin to take hold?
As an association, it’s our responsibility to report and analyze industry events with clarity that can help distributors grow — to provide the “why” behind the “what” whenever possible. In this case, it’s to push the conversation forward by providing context — to fuse together distributors’ questions and concerns with DemandBridge’s direction and plans.
With that in mind, I reached out to multiple distributors of various sizes who use e-Quantum and DemandBridge to get their take on potential short-term effects and long-term expectations. I also conducted an hour-long conference call with David Rich, CEO of Norcross, Georgia-based DemandBridge and the leader of the combined entity; Ross Barker, founder and CEO of Reno, Nevada-based e- Quantum; and others from both companies. I also received emailed questions and insight from several industry professionals.
As one distributor put it, “We’ve all been asking for different things from both companies over the years. So now that they’re the same company, what does it really mean for us?”
Ultimately when the dust settles from the deal, the movement of data, information and business in our channel will continue to be dictated by end user needs, distributor choices and market forces. PSDA is an impartial advocate of all members.
The goal is to present fair analysis that goes beyond the press release. To that end, below are nine interconnected thoughts about the deal. More importantly, PSDA invites you to share your own thoughts, questions and opinions with our team. In the coming months, as all industry technologies continue to evolve, PSDA will publish ongoing DemandBridge news, as well as profiles and case studies of other tech firms. We’ll use the association’s printed and digital vehicles to spotlight applications, ideas and tips that can help distributors and manufacturers progress and grow.
Here are the nine thoughts, each of which is connected to the preceding one:
1. This news caught distributors off-guard …
In the middle of the opening session of P2P, whispers spread quickly: “Did you see the news?” One distributor received a tap on the shoulder and a voice in his ear, urging him to check his email immediately. “I was dumbstuck — this was a bombshell dropped on us,” he said of the DemandBridge/e-Quantum deal.
His company uses all of e-Quantum’s software modules, including Quantum Net (integrated system for electronic ordering and more), Q-Store (retail consumer catalogs) and Q-Design (tool for web-to-print tool and direct mail marketing). About 15,000 online orders have gone through his e-commerce system since adopting it years ago. “It helps us stand out among competitors, and now I don’t know what to expect, honestly.”
Said another e-Quantum user that relies on the software for back-end accounting, inventory management, image storage and more: “This was such a shock. I have no idea where it goes from here. I’ve kept asking people, ‘What are you going to do?’ They say, ‘I don’t know, what are you going to do?’”
In retrospect, others pointed out, perhaps they should have anticipated the news. It seemed strange to some that on Sept. 12, e-Quantum canceled its user conference slated weeks later for San Antonio. (An announcement cited storms impacting Texas and Florida, “home to a large number of e-Quantum clients, partners and their families and friends.”)
“Maybe this was a surprise to everyone, but maybe it was also inevitable,” another distributor said. “Ross [Barker] has been an industry veteran for a long time, and he had to have some kind of exit strategy. No one quite knew what that would be, but it makes sense that it was coming at some point soon.”
2. And it’s major news, given how much business moves through these platforms …
It’s not like fewer and fewer clients are ordering online. End users are more sophisticated today than ever, and we’re all used to using slick technology to meet our demands.
“My customers were ramping up their use of e-Quantum’s technology, and we basically began using their tools for our entire business,” said one distributor with three employees. “When we talk to a new prospect about the need to buy print and promo, our first question was, ‘Can this be an online company store?’ If not, then it wasn’t the right target for us.’ It’s absolutely critical that we be able to maintain our clients’ stores.”
His company is one of more than 580 distributors that use e-Quantum’s software. Some 460-plus distributors also use Quantum Net for electronic ordering, custom client catalogs, creating and proofing variable print items, online reporting and tracking, and other functions. Since Barker, who ran a distributorship of his own for years, dipped his feet into the tech waters more than 20 years ago, e-Quantum had positioned itself (among other ways) as a company that understands the nuances of the niche, led by a person who was literally among them. Small and mid-sized distributors accounted for a majority of the firm’s business.
DemandBridge, for its part, has chiefly targeted larger distributors and marketing agencies. Its platform is used by 3,000 brands and 1.2 million registered users, the company said. Its DB Enterprise e-commerce technology helps distributors manage, customize and distribute tons of marketing content and collateral — distributors rely on the tool to find, win and keep large accounts. DemandBridge’s focus lately has been on positioning itself to handle everything related to marketing execution, a positive goal for distributors that find ways to help clients make money (marketing departments), not just save it (procurement departments).
In the press release, Rich said: “End user demands are changing, the brands themselves are changing and the goals of our forward-thinking [clients] are evolving accordingly. Simply put, marketing service providers who want to grow their businesses beyond traditional services will need more enabling technology than the previous generations.”
In the months leading up to P2P, DemandBridge essentially rebranded and retooled under Rich’s new leadership. It has been using the motto “DemandBridge Reimagined,” and has been eager to talk to the industry about its movement to the Microsoft Azure Cloud, ability to serve as a software-as-a-service provider, upgraded sourcing technology for distributors and other moves.
3. And those platforms have been scrutinized lately, but building technology for this audience is challenging …
Distributors say both e-Quantum and DemandBridge platforms have their pros and cons, and both companies are quick to acknowledge client frustrations recently about slower-than-expected upgrades and enhancements. Said one distributor about e-Quantum, “We kept hearing about Version 12 for the past 18 months, but we haven’t seen it yet. That’s OK if what we’re going to have is better, and soon. My big question is what will we get that makes our business operate better?”
A challenge for technology companies in the print and marketing services industry is defining what “our business” means, because distributors are flexible by their nature. One distributor who uses e-Quantum primarily for order entry said he just wants the system to work reliably. Another distributor wants the technology to empower his salespeople to customize marketing materials and sales presentations on the fly. Yet another distributor wants better reporting functionality and improved tools to boost sales of office supplies and promotional products.
This is undoubtedly an over-generalization, but technology tends to perform best when its target market is defined and specific. The Night Sky app is for people who appreciate astronomy. Team Snap tools are for coaches who want to run their teams more effectively. DemandBridge now has the task of improving and/or creating software for companies that sell brochures, business cards, labels, packaging, promotional products, apparel, tags and much more — often customized and personalized.
That truth is coupled with this one: Components of both e-Quantum and DemandBridge technology are far from new. And the firms themselves are tied to industry predecessors: e-Quantum suddenly gained clients of differing needs in the late 1990s when it took over Galaxy Systems, and TopForm® Software (the precursor to DemandBridge) was known more for its back-end business operations prowess than for e-commerce advancements before it was purchased by WebbMason Marketing in 2006. Essentially, this has long been a market that values function over flash.
“The technology companies that have dominated this industry are fragmented and small,” Barker said. “With the growing complexity and proliferation of technology options today, it was expensive for all of us to adequately address the needs of the industry in the 2020s. I thought this was an opportunity to give the industry a company with the right resources for the future.”
Said one distributor, “Listen, tech is hard, even for new tech companies. e-Quantum has been around for 30 years, and they live in a world of bugs and fixes. Has most of the programming for both companies been reactionary? Yes. But I don’t care what software program you’re running or how big you are, there are always frustrations.”
Said another distributor: “We can’t expect DemandBridge to rewrite something that has been around in different stages, with different nuts and bolts, for 20 years. There has to be something new coming down the pipeline.”
4. And the audience is now asking for a dial, not a switch …
All e-Quantum clients who shared their perspective about the deal expressed one overriding fear — that changes would come in the form of a switch instead of a dial. “We don’t want to wake up soon to the news that we’re forced to suddenly move to something we haven’t asked for,” said one distributor who has 30 people trained on the system and 17 years of data stored in it.
If that metaphorical dial turns at a speed that makes sense for distributor principals who sign dotted lines — in other words, if the technology integration and migration path crafted by DemandBridge yields empowering software that addresses distributors’ main goals and concerns — people will look back on the deal as great news.
“I feel this is a good thing for the industry — to have a leader with a large enough base and commitment to bring the technology we need,” one distributor said. He then added, “In the short term they will be running like chickens with their heads cut off trying to cover all the questions and issues that hundreds of customers will bring.”
Said another distributor: “I think what we will have will be as good, if not better. I have other concerns — cost chiefly among them — but I’m hopeful this will improve our business and not hamper it.”
“Here’s what we really want,” said another. “Nothing much changes, and then eventually the best of each technology rolls together into something better than either is now.”
Rich said e-Quantum users should expect "business as usual over the next year" and receive the same quality of products and services by the same team of people users deal with now. “If you’re an e-Quantum customer today, you’ll be an e-Quantum customer tomorrow.”
One day, he said, DemandBridge will likely rewrite the back-end tool, taking best practices and features from both, “now that we have pooled our talented resources.” But in the meantime, “we have to evolve both products, and we have to make it easy and affordable to give people choices.”
5. While those users are also waiting to learn more about DemandBridge’s migration and technology development plans …
“I assume the upgrades will be good because DemandBridge seems smart,” said one distributor, “but the larger question is when they will occur. If there are two different systems, I imagine they’re going to run parallel for a period of time. What should our expectations be? What’s the migration path?”
For months, the DemandBridge braintrust has planned for that very question. “Our No. 1 priority is to get all the products into the cloud,” Rich says. “Interfacing between our e-commerce tool and sourcing tool is No. 2. Strategically, if we can eventually find a way to get everyone on the same system, we can do a whole lot more.”
The rationale: Marketing service providers who want to grow their businesses crave technology that’s innovative and customizable, developed and updated by true software experts who can take their business to new heights. “With our platform move to Azure, companies will have the freedom to deploy wherever they want, using the applications and frameworks of their choice,” Rich said. “This cloud solution will improve our performance, enable us to ‘onboard’ new clients quickly, give users access to advanced business integration tools and keep companies on the leading edge of marketing services.”
This summer, shortly after DemandBridge’s Partner Conference in Atlanta, the company’s e-commerce and sourcing tool were moved to the cloud and are running smoothly, Rich said. The ERP back-end product will soon follow, with WebbMason Marketing as the beta site customer to test the integration and a new reporting/analytics platform (powered by Microsoft). “We have plans to do similar transitions with e-Quantum software soon thereafter,” Rich said.
Much of what DemandBridge is building is based on the new realities of an end user’s marketing team. More “touch points”— digital, print, email, mobile, social, CRM etc. — mean more opportunities for marketers to connect with customers. Keeping interactions consistent across multiple channels, creating a seamless experience for customers, and quickly determining how to optimize spend necessitate an “always-on” engine, Rich said. “By supplying that engine, DemandBridge can help clients drive more business.”
It’s also important to note that DemandBridge wants to give customers the ability to purchase modules in totality or as standalone offerings that can also be easily integrated to other e-commerce platforms, back-end ERP systems, procurement platforms and customer intranets. Rich and his team have also touted the capabilities of DB Alliance, a web-based procurement tool to help distributors and brands manage quotes and order distribution with vendors and partners.
6. And DemandBridge leaders address other concerns and questions …
Barker, who was in New Orleans at P2P, encourages e-Quantum users to anticipate valuable benefits the deal will bring. “This deal represents an enormous benefit to our customers and partners. These include distributors, independent printers, manufacturers, agencies and enterprises.”
But, as Rich points out, change often brings questions and trepidation. In addition to the desire among e-Quantum users to remain on the same platform for the time being “while they allow us to explore and examine and play around with what they want the new DemandBridge to be,” as one distributor put it, they are voicing other concerns to the DemandBridge team:
- The Ownership Question: When WebbMason bought TopForm® Software in 2006, it was essentially an X to block in a tic-tac-toe game. WebbMason was a large TopForm user, and the X in this case blocked then-acquisition-aggressor Global DocuGraphiX from buying the software provider. WebbMason made the move figuring that owning the company was the best way to prevent problems, ensure timely upgrades and develop useful technology. There was never a data breach.
Earlier this year, DemandBridge spun off from WebbMason’s ownership and began operating as an independent software vendor. “Simply put, we aren’t WebbMason anymore,” Rich said.
- The Cost Question: Without getting into the weeds, DemandBridge is more expensive than e-Quantum. The concern, especially among smaller distributors: Will it be out of their price range, especially now that DemandBridge has to make up for the money it has spent on Barker’s company and technology upgrades? Noted one distributor: “I think it’s fine to expect to pay a little more, as long as we’re getting a little more.”
“It comes down to the total cost of doing business and the total cost of IT ownership,” Rich says. “We have to sell value. Actually, I’ve been very encouraged by my conversations with small distributors, especially ones who have questions about how they might best use different tools. I look forward to talking to more of these smaller companies. We’re not going to leave them in a lurch. I will say this, though: For companies that are just biding their time and want a different version of QuickBooks, they’re probably not going to take advantage of this opportunity.”
7. While potential competitors seek to gain a stronger foothold on the market …
Shortly after the deal news was announced, at least one company sent a marketing email that appealed to the perceived unease of e-Quantum users, inviting them to consider other vendor options.
Those options are more numerous today than in years past, with companies such as Launchpad, Foundry Commerce, Four51, OPTAMARK, Support One, Webjaguar and others angling for business with different sweet spots and strategies.
“I fully expected a competitive response, and embrace it, actually,” Rich said. “The market wants and needs choices and healthy competition. Whether there is further consolidation or one of the big guys like SAP/Oracle/Microsoft decides to focus on this vertical. It will keep us all sharp and will help to further educate the industry on the value of IT. So I welcome it.”
8. And ultimately people are at the heart of what will be developed …
Much of the attention shifts to Rich himself, along with his team of developers. Rich’s bio is chock-full of accomplishments. He has more than 35 years of enterprise IT experience, including 28 years at Accenture. At Accenture, Rich was renowned for helping large companies implement ERP systems for multibillion-dollar corporations. Rich also served as CEO at Silicon Valley-based Revolution Analytics, which Microsoft acquired in 2015. At DemandBridge, he aims to build a “mini Accenture for the PSDA market.”
Barker is high on the DemandBridge team. “Our combined companies possess the technological talent necessary to create the marketing execution solutions of the future,” he said. “It is a team that will provide the requisite investment in talent, technology, products and services that is unrivaled.”
The team includes a combined force of talent from DemandBridge, e-Quantum and members of WebbMason’s IT group that originally developed some of DemandBridge’s current platforms.
“Young talent is tough to find in this space, and I hope DemandBridge is able to bring on people who can write in current programming languages,” said one distributor. “It’s not easy to find that kind of talent, but for users to ultimately be successful in the future, we need IT firepower.”
9. While another person, Ross Barker, bids farewell and deserves a tip of the cap.
Barker spent an amazing 52 years and one month in this industry. That time was spent as a forms and print distributor as well as a software and IT services provider. He was and continues to be an advocate of the distributor channel.
Barker is a former PSDA president, and a past recipient of the association’s Member of the Year Award and President’s Award. His down-home, tell-it-like-it-is style is endearing and infectious. “I couldn’t have chosen a better profession for meeting wonderful people — ones who challenged me and assisted me along the way,” he said. “This industry is filled with hard-working, smart people who I’m proud to know as friends and colleagues.”
In terms of industry technology, Barker said, software providers were initially ahead of the game — and can be again. “The challenge is the distributor community must increasingly have sophisticated technology.”
In 2010, Barker wrote this in his company newsletter column, recalling an earlier time when e-Quantum decided it needed to build a Windows-friendly version of its software: “There are times when optimism, ignorance and enthusiasm trump all business smarts. You see, I knew that everything would be fine if we just built our Windows version. And, I knew our clients deserved the best and our team warranted my confidence. We just needed to work longer, harder, smarter — a sure-fire formula. And it worked. One primary reason I love this industry is that we do build things. Everyone in our industry, in one capacity or another, is employed in the process of building. We envision, design, create, innovate, manufacture (and I hasten to add, program) all for the purpose of building: better products, better services, better solutions, better futures. e-Quantum is proud to belong to an industry of builders.”
As a new generation of technology providers comes to the fore, they’re doing so on the shoulders of dedicated people like Barker. The idea of advancement always fueled his fire, and as the torch is passed now to new generations, new development and new technologies, perhaps it’s good to keep in mind that the industry has never stopped evolving.
This deal news is the latest testament to that truth.