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Why DemandBridge Bought Kramer-Smilko

Posted by Darin Painter on Jan 31, 2018 9:47:24 AM

By Darin Painter, editor-in-chief, PS Magazine

DemandBridge.jpgAs the press release announcing the deal points out, DemandBridge and its two recent acquisitions — e-Quantum and now Kramer-Smilko — “together bring more than 90 years of experience and growth within and beyond the independent print services industry. 

That’s true, but the reason for the deal goes far beyond that.

For starters, Kramer-Smilko has been meeting annually with DemandBridge since 2008, when the two companies formed a supply-chain-automation partnership. The agreement linked both companies’ vendor partners to their distributor networks in a system that involved automated price books, integrated catalogs, feedback-generation tools and the ability to monitor production. An iteration of that technology is now DemandBridge’s DB Alliance platform.

Kramer.jpgMore than anything, though, the DemandBridge/Kramer-Smilko deal is predicated on positioning. CEO David Rich wants a deeper client base for his company as DemandBridge moves its platform to the Microsoft Azure cloud and develops interfacing between its e-commerce and sourcing tools. In October, after the e-Quantum acquisition, Rich said, “If we can eventually find a way to get everyone on the same system, we can do a whole lot more.” With that in mind, DemandBridge targeted the Kramer-Smilko because it had the most number of distributor users to roll into its product suite.

Rich and his team care deeply about the quality of distributors that had been loyal to Kramer-Smilko — ones with “enterprise” clients that rely on distributors for marketing campaigns, cross-media strategies and progressive ideas. A handful of large distributors have been Kramer-Smilko users for years, even as they adopted tools of other technology systems.

Focused on Connecting

Rich says he first thought about buying Kramer-Smilko when he analyzed the industry’s software players while attending PSDA’s CEO Summit last year in Coral Gables, Florida. He was impressed with Kramer-Smilko’s historic desire to boost its customers’ revenue, and its focus on getting different technologies to “talk” to each other.

For the past few years, Smilko’s team has developed a web services front-end that enabled distributors to hook into multiple systems, including proprietary ones run by end users. “We can hook anything up to our system in a very short time — we essentially run a lot of things into one pipe for our customers,” Smilko says.

Kramer-Smilko’s flagship software was called Renaissance, relied upon by distributors selling to clients in markets such as health care, banking, finance and insurance.

At is heart, Kramer-Smilko had always been a service-oriented supply-chain-efficiency specialist. The company had built alliances with distributors and EDI connectivity with disparate systems, looking for ways to help distributors contain costs and address unique needs. “No one is going to provide the magic bullet everyone wants,” Smilko says, “but strategic partnerships have always been our bread and butter.”

He says he expects a smooth transition for his clients to DemandBridge’s platform.

“I’m Putting an Orchestra Together”

DemandBridge has evolved into an integrated business platform delivering “seamless marketing solutions in the cloud.” Its platform is used by 3,000 brands and 1.2 million registered users, the company says. 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. The company’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).

The company is still digesting the acquisition of e-Quantum, Rich says, and is moving forward with its integration and product-development strategy. “It’s not my first rodeo, and I know it takes a village to succeed,” he says. “I want to maximize the strengths of our team and minimize weaknesses. Doing my job is to be an orchestra leader. We don’t want great saxophone players trying to play the trumpet. But I’ve played every instrument, and I think  that helps.”

Rich has more than 35 years of enterprise IT experience, including 28 years at Accenture. At Accenture, he was renowned for helping large companies implement ERP systems for multibillion-dollar corporations. He also served as CEO at Silicon Valley-based Revolution Analytics, which Microsoft acquired in 2015. Today, the DemandBridge technical team includes several members of distributor WebbMason Marketing’s IT group — folks who originally developed some of DemandBridge’s current platforms.

It remains to be seen what role Smilko, a programmer/developer by trade, plays in the company. “I’m open to the possibilities — it’s an exciting opportunity,” he says. Rich says his engineers need guidance, and that Smilko’s mind and client relationship skills are needed. “We need him to play a major role.”

A few days before the acquisition announcement, Smilko took time to talk with several customers about the upcoming news and DemandBridge’s technology plans. He spent 45 minutes on the phone with one distributor. “I think this is the best deal for all three companies — DemandBridge, e-Quantum and us,” he says. “It’s certainly better than all of us on our own. We can combine the skills, talents and resources and pull in the same direction without duplication. I really do think this will be a win for everybody.”

According to the press release, the new company will “evolve and transition its products to leverage DemandBridge’s presence on the Microsoft Azure Cloud and to integrate technologies in the pipeline — from Microsoft PowerBI and Cloud Foundry, to other digital marketing technologies planned for 2018 and beyond.”

“We’ll Absorb These Two and Take a Breath”

Although e-Quantum and Kramer-Smilko were longtime technology suppliers and stalwarts of PSDA, the software environment in the industry seems to be expanding. Companies such as Foundry Commerce, sourceit, Launchpad, Four51, OPTAMARK, Support One, Webjaguar and others are angling for business, with different sweet spots and strategies.

After making two acquisitions in four months, Rich says he plans to pump the breaks on further deals. “We’ll absorb these two and take a breath. At this stage, I’d have to be convinced that any other deal makes sense. We’ll continue to be opportunistic, but I think we grabbed the big players we needed.”

Topics: Press Release

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