1.2 Companies on the Move:

CLICK HERE FOR COMPANIES ON THE MOVE

For the past 4 years, we've published information about companies on the move in our monthly report.  No more.  Now you can publish and view that information instantly on our web log (blog)!  To view, click on http://netsudsannounce.blogspot.com/.

Why email only to your small email list of associates when you can post this information on the blog and have 5100+ NetSudsers view it.  To publish to the blog send me an email requesting permission.  You may have to create your blog account at www.blogger.com.  After you have an account, you can post to the blog as much as you want.  You need only follow some common sense guidelines, e.g. don't post every press release, don't post sales information, don't post defamatory statements, etc.  If you "spam" the blog, you will be removed.

If you'd rather have me to post your information to the blog, just email me at cotm@netsuds.com.  You can report (1) the formation of a new start-up, (2) momentum change at an existing company, (3) addition of key hires, or (4) a funding event.  We do not accept press release changes from third parties.  We must hear directly from an executive at the company which is 'on the move'.

4.1 NetSuds on Tour

NetSuds loves on-site tours!  Email me if you want to show off your company.  I can be reached at matt@netsuds.com. 

4.1.1  No Tours This Month

4.2  Email Advertising

The NetSuds and MedicalSuds email lists reach 7600+.  The NetSuds email lists are double-opt-in and concentrated on professionals in the communications, IT and Internet markets.  The MedicalSuds email lists are double-opt-in and concentrated on professionals in the medtech, biotech and life sciences markets.  So, rather than spend your advertising dollars on any other email lists in the Twin Cities, consider the NetSuds and MedicalSuds lists.  Contact matt@netsuds.com or 612.605.5252.  For current ad rates, visit www.netsuds.com/adrates.htm.

6.0  Sistina Software:  A Linux Success Story, Right In Our Backyard

Sistina’s Acquisition by Red Hat Shows Locally Grown IT Startups Can Succeed With Right Team

by NetSudser Graeme Thickins(photo at left), www.graemethickins.com with contributions from Matt Noah

But the road to that acquisition was not easy – and the story wasn’t just about getting the product or technology right. Equally important, say the key players, was getting the company to the next level. And that part of the story happened in less than a year.

“We began looking at them in early 2002,” said Jeff Hinck, a partner with Crescendo Ventures of Minneapolis and Palo Alto, “but we didn’t feel the product was ready for the enterprise customer.”  Later that year, however, key software improvements had been completed, and Linux in general was gaining more traction as a solution for big data centers – where Sistina’s unique storage infrastructure software was especially needed. As a firm that continues to invest in promising Minnesota firms, Crescendo liked what it saw and, by January 2003, had teamed up in a new financing round with St. Paul Venture Capital, which had also made a smaller infusion in early 2000.

7.0  The Empowered Store: Revolutionizing the Retail Ecosystem

by NetSudsers Chris Turnquist, Christopher.P.Turnquist@syntegra.com, 651.415.4490, and Stan Elbaum, stan.elbaum@aberdeen.com, 617.854.5236

Chris Turnquist, VP Value Chain Services, Syntegra

Stan Elbuam, VP, Strategic Solutions, Aberdeen

The retail industry is under operating pressure from three key market drivers which make it difficult to serve consistently; increasingly educated customers demanding more product information, eroding retailer brand loyalty and customer fragmentation.  

These market drivers hit retail in every part of the business but the pain is ultimately felt in the stores.  That can mean increased out of stocks, employee turnover, increased markdowns, increased labor costs, increased inventory, lower margins, higher cost to serve and lost customers. 

Empowered consumers are increasingly directing the energy of the retail ecosystem, leveraging the Internet to demand customized, comprehensive and multi-channel solutions. Today the customer drives the sale. They drive the supply chain, they control the inventory and they can make or break a retail operation.

Retailers need to leverage technology and store system processes to create an environment where the customer keeps coming back. The empowered store is designed to gain more loyal customers and ultimately lower the cost to serve them. 

The Empowered Store 

Most organizations selling to consumers have adopted the limiting strategy of setting up multiple competing channels, with little or no ability to cross-sell or cross service customers. And the traditional supply chain centric retail business model does not pay sufficient attention to the root source of consumer satisfaction – the physical or virtual store. 

The empowered store however, is a unique model that leverages business and technology strategies for retailers selling direct to consumers.  Progressive retailers are already successfully putting elements of this winning approach into effect with an ecosystem of partners and are gaining significant improvement in marketplace penetration. 

Market Forces are Shredding the Sustainability of Retail Status Quo  

A set of pervasive and irreversible market forces is dramatically changing the core dynamics of successfully serving consumers and, with it, reshaping the very definition of retail market competitiveness and effectiveness.  The change of most impact is the emergence and growing dominance of the empowered consumer, who is increasingly shifting real power from both brand manufacturers and traditional distribution channels to the end consumer. 

The pervasiveness of the Internet has accelerated and amplified the growth of the empowered consumer who can now explore and value product alternatives, and become better informed than virtually all of the employees attempting to service them. 

The Internet has also fueled the emergence of alternate buying channels, both for those who traditionally sell to consumers, as well as a growing array of non-traditional and competing direct-to-consumer distributors and manufacturers. 

In addition to the Internet, customer fragmentation and diminishing brand loyalty are market forces that are dramatically affecting today’s retail environment.  To meet customer demand, you need a better-trained staff, attractively priced product and well-managed inventory. To address a fragmented customer base you need targeted marketing programs, localized store layouts, product mixes and pricing.  Finally, to strengthen brand loyalty it is imperative that your retail environment deliver a unique experience.  To successfully deal with these challenges, empowering the customer is crucial and the answer must start at the stores.

Together, these market forces represent a fundamental, pervasive and irreversible change in the criteria that retailers use to keep consumers coming back to the stores. 

Inside the Empowered Store 

Successful retailers are embracing an approach that empowers the customer in the store. 

The empowered store is a combination of technology and process, which enables the retailer to leverage all of your resources to empower customers, sales associates and suppliers to collaborate and maximize store performance. 

Four Key Components of the Empowered Store 

There are four key elements that make up the heart of the empowered store.  They include customer empowerment, sales associate empowerment, supplier empowerment and business collaboration. 

Customer Empowerment is about extending the value from the retailer to the customer by providing additional access, content, education and commerce to wherever the customer is located.   Self-service and wireless capabilities allow the customer to get the information they need to make a buying decision in their shopping path. 

Sales Associate Empowerment links store associates to resources to increase their effectiveness and help them more diligently serve the customer. The focus is to provide store associates with services and capabilities to better serve the customer at the point of service and proactively adapt to emerging customer demand patterns.

Supplier Empowerment is about shifting access, content, inventory and responsibility from the retailer to the supplier.  This allows the supplier to more effectively manage their demand chain and increase insight into product lifecycles. While retailers should continue to improve supply chain execution, the store also needs to incorporate empowering processes and technology to serve the consumer in real time. 

Business Collaboration enables retailers to effectively align, balance and leverage resources across all dimensions of their retail networks. 

Progressive Retailers are Successfully Implementing Components of the Empowered Store Today  

·        Pilots are being conducted at leading retailers, which are producing significant results.  As with most operational changes, the more direct the benefit to the consumer, the greater universal acceptance.  New in-store communication options and mobile points-of-service are moving the necessary intelligence to the point and time it is required by the consumer.  Associates are confidently assisting in the sales process because they are provided the necessary tools to deliver product intelligence and service. 

·        British Telecommunications (BT) has invested in RFID as a stand-alone venture.  RFID promises to dramatically increase the visibility and manageability of the overall supply chain.  Manufacturers and Distributors will be empowered with these capabilities and able to accept additional accountability and improve overall supply chain performance. 

·        Retailers continue to deploy Wi-Fi infrastructure at break-neck speeds.  The layout of the store is the first beneficiary in terms of flexibility and configurability.  POS terminals can be relocated and temporary ‘sale’ stations can be deployed anywhere in the store to facilitate faster and more effective checkout.  While handheld POS still presents challenges for some retailers, innovation in this area remains strong and will continue to gravitate toward consumer preferences. 

·        Microsoft, Fujitsu and other in-store system providers are building solutions on a web services framework, which allows in-store components to be deployed to remote and mobile platforms for execution.  This flexibility allows the retailer to tailor their systems to meet the needs of their associates, consumers and suppliers.  In addition, it leaves room for the stakeholders of the store to innovate in the areas of service, configurability and intelligence. 

“Based on in-depth industry and consumer research, Microsoft has come to the conclusion that the demands of the digitally-enabled consumer will change the dynamics of retailing,” said Brian Scott, general manager of Microsoft’s Retail & Hospitality Industry Solutions Group.  “The empowered store concept is consistent with our views and properly acknowledges that one of the retailer’s keys to success is to leverage the familiar technologies—such as cellular phones, personal digital assistants and other wireless devices—already in the consumer’s hands in order to create a compelling and fulfilling shopping experience.” 

The Empowered Store will restructure the Entire Retail Ecosystem 

The Empowered Store business model will cause a profound and disruptive ripple throughout the entire retail ecosystem and will create a new paradigm for long-term success for all participants. 

All retail ecosystem players including manufacturers, service providers, logistics providers, component and material providers will be driven to align their strategies and capabilities to meet new retailers’ requirements to enable the empowered store.

Winners and losers in the retail market will be defined less by the lowest delivered cost and more by the ability to support empowerment, agility and compliance based risk management for themselves, their ecosystem partners and their customers.

Successful strategies are based on embracing and leveraging, rather than resisting, the force of the empowered consumer.  Aggressively leveraging all ecosystem business partners provides target customers with a customized experience including specialized storefronts, categories, and total solutions. 

The Empowered Store.  Ultimately it’s the power to bring them back.

The world of retail has a stark metric – your customers come back or they don’t.  The bottom line to the empowered store is to keep a growing stream of customers coming back to the stores. 

8.0   The ROI Of Audio Conferencing

By NetSudser Craig W. Morse, 763-694-0809,