LogFire has its head in the clouds
The WMS business feels like 1999 all over again. Back then, there were a couple hundred application providers and start ups were popping up all the time. After the tech crash, many of those companies went away, were gobbled up by larger competitors like Manhattan Associates, RedPrairie and HighJump or rolled up into new companies such as Accellos and Cadre Technologies.
Now, the startups are back, but the focus for many of these new companies is the cloud. The other day I spoke to Neil Thall, executive vice president of strategy for one of these new players, LogFire.
Now about 4 years old, LogFire was started as a consulting firm that focused on implementations and upgrades of traditional software systems, including Manhattan Associates. The company counts Home Depot, Macy’s and Hot Topic among its roster of clients.
LogFire’s pedigree is impressive. Company founder Diego Pantoja-Navajas, Thall and many of LogFire’s consultants have experience with brand name supply chain management companies. Pantoja-Navajas, for instance, was a senior consultant at Manhattan Associates and a manager at Aldata. Thall was an executive vice president at Manhattan and CEO of Aldata Solution.
While the company began as a consulting firm, LogFire soon realized there was an opportunity to provide add-on software applications to its existing customers and to provide a full-blown WMS to 3PLs, mid-size retailers and mid-size suppliers to retailers who weren’t being served by the traditional WMS market. Although LogFire will implement behind the firewall, like a traditional WMS, or host a system, the focus is on a cloud strategy. “Technology in the cloud can be developed much faster than traditional software,” says Thall. “What’s more, traditional software has to be updated every three years and that has priced many end users out of the market.”
After a consulting gig or two south of the border, it also led to a focus on South America. “South America is a Greenfield opportunity that was not being mined,” Thall says. “The Chilean and Brazilian economies are doing very well and we’re seeing opportunities in Colombia and Peru.” For example, LogFire is installing a WMS in the largest super market chain in Peru.
“On of the things we heard going in is that it’s hard to do business in South America,” says Thall. “That is true. But that doesn’t mean we shouldn’t do it. You have robust economies that respect what we’re doing in the US and want to learn more. We’ve taken the time to learn how to do business there and to do it right.” Today, he adds, half of LogFire’s business is coming from South America.
While cloud solutions have traditionally been less robust that conventional WMS, Thall argues that is changing. “We have full inbound and outbound functionality with visibility. We are RF and voice enabled. And, we can install our systems in a retail store as well as a DC to give full visibility across a supply chain.”
LogFire has also developed “cool guy” functionality, such as interfaces to smart phones and iPads.
“We can install a system in six to eight weeks in a complex distribution center,” he says. “The up front costs are low, there are no licensing fees and our billing model is based upon your volume. That’s attractive to 3PLs because we can match our costs to their revenues.”
Cloud solutions are certainly the fastest growing space in supply chain software, but still a relatively small slice of the revenue pie. Long term, it’s hard to say which model will prevail. But it’s a fascinating space to watch as it develops.