DiCentral: EDI Can Be Channel-Friendly

Company:

Headquarters: Houston, Tex.

Technology Sector: Software

Key Product: DiWeb

Year Founded: 2001

Number of Channel Partners: 175 in U.S.

Ideal Channel Partner: Business process consultant

Why You Should Care: EDI vendors aren't known for their channel friendliness. DiCentral is not only an exception, it's also a prime example of how Microsoft's Software Plus Services vision will work in the future.

The Lowdown: DiCentral, a Houston-based SaaS provider, believes that the future of Electronic Data Interchange (EDI) technology will involve a mix of software and services.

EDI has proven an effective pathway for exchanging supply-chain data between and within companies, but in some circles, the technology is viewed as archaic because of its roots in the mainframe and minicomputer era. EDI vendors have also acquired a negative reputation in the channel for not paying commissions and rebates in a timely manner, leaving VARs to fight for what they're owed.

But with a channel-friendly approach to EDI that includes elements of software and services, DiCentral has found a lucrative niche within the ERP and accounting software markets that's giving the company a giant addressable market -- essentially any company in any industry with a supply chain.

For now, most of DiCentral's customers are manufacturers and distributors selling through the retail channel. DiCentral combines elements of SaaS and locally installed software to give these firms a handle on flood of data flowing between themselves and their customers, says Eric Braswell, senior director of global channels.

"Our EDI solution includes local software that rests against the ERP or accounting application and handles integration of large amounts of orders and documents flowing between customers and trading partners," said Braswell.

After six years of primarily direct sales, DiCentral in 2007 launched a channel program through which it markets its wares to ERP and accounting solution providers, many of which are themselves partners of Sage Software, Intuit and Microsoft Dynamics. Because DiCentral is an add-on to the solutions that VARs sell to their customers, there's no channel conflict, and that's an important distinction given solution providers fears' that SaaS could interfere with customer relationships.

Braswell is well aware of these fears and says DiCentral is an example of how Microsoft's Software Plus Services vision will work. "There are no circumstances in which we take over the relationship, and customers contact the VAR or consultant to handle all issues related to our products," Braswell said.

For each opportunity that DiCentral's lead generation engine brings in, the company assigns a direct salesperson to work with the VAR. However, DiCentral's salespeople receive the same compensation for these deals as they do for other leads, giving them no incentive to take deals direct, according to Braswell.

As the retail industry continues to seek greater efficiencies, DiCentral looks set to continue chipping away at the unsavory associations that have built up around EDI, and serves as proof that the technology can play well in the channel.