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Accucode Founder On Spotting The 'Next Disrupters' And Monetizing AI

Kevin Price speaks about key differentiators at the solution provider such as custom artificial intelligence projects and unique Software-as-a-Service offerings.

In two and a half decades piloting Accucode, founder and CEO Kevin Price has turned the company into a solution provider powerhouse for the retail, manufacturing and transportation industries with a focus on spotting key tech trends early.

"I'm always looking for the next disrupter—like Meraki, the wireless division at Cisco. We were a Meraki partner five years before Cisco bought Meraki. Because I recognized, before Cisco, that Meraki represented an architectural lead in the network, and that they were going to be a disrupter," Price said in a recent interview with CRN. "I like to get in with them early. Because I can help them in a way that few partners can in those early stages. And then that positions me to ramp up and grow with them, once they become an industry standard like Meraki did in being acquired by Cisco."

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More recently, Accucode has seized upon opportunities around 3-D printing and artificial intelligence, with specialized divisions to deliver products and custom projects to customers. The company has also expanded into launching its own Software-as-a-Service offerings to tackle unsolved issues in key verticals, such as the complexity of order management in the retail and restaurant industry.

This year, Centennial, Colo.-based Accucode ranked at No. 302 on CRN's Solution Provider 500 while also landing on CRN's Fast Growth 150 and Tech Elite 250 lists. With a ranking on all three lists, Accucode this year received CRN’s prestigious Triple Crown award.

What follows is an edited portion of our interview with Price.

How has Accucode expanded its focus over the years?

We are in our 25th year of operations. We started out in the barcode space and then shortly after that moved into mobile computing and wireless networks. We've expanded as those technologies became commoditized and part of the overall enterprise architecture. We became one of the leading suppliers in the U.S. for those technologies, and then we've expanded from there. Accucode is the original parent company where we started out as a value-added reseller and service provider. There's a wholesale services division called InDemand Technologies, where we do B2B technology delivery service and support for other companies. We've got Accucode 3D, where we may do additive manufacturing and are a reseller and integrator of 3-D printing and scanning technology. We have a Software-as-a-Service division called Jellyfish that does collaborative order management and supply chain management. We just launched the Accucode Labs division last year, where we've got electrical engineers and chemical engineers with in-house capabilities to develop antennas and electronics. We can actually manufacture PCBs [printed circuit boards] and electronics in-house, so we can design you a custom antenna and manufacture it all in-house using additive manufacturing.

We've got Accucode AI, our artificial intelligence division, which was launched a little over three years ago. We just opened our AI R&D facility on the University of Limerick campus in Ireland. And we've got a partnership with the University of Limerick, and we've got some very cool artificial intelligence technology coming where we're applying neural networks and other technology to business process automation and workflow automation and logistics. And then that R&D facility and operation in Ireland has also been the launch of our entry into the EU. We've actively began selling and supporting customers in Ireland in the U.K., and in 2020 we'll be expanding out across the rest of the EU.

Could you tell me about your focus on custom solutions and doing differentiated work for your customers?

My job is not just to sell them some technology. My job is to help them achieve their business objectives, and make sure we understand the objectives in their environment and their requirements. That leads us to a very specific approach to solving the problem that often is highly tailored to them and their environment and their objectives. We've got hardware design and manufacturing capabilities in-house now, and we've always had software and integration capabilities. That's differentiated us a lot. But I'll actually say that the key thing that's differentiated us in our core markets has always been our philosophical approach with the customer—which is, I really would rather be paid to deliver the objective than to ship you part numbers. Just being a reseller of technology is not a very interesting business model. Being an extension of my customers’ daily operations and helping them learn how to scale the acquisition of technology—and keep technology deployed, supported and working—that's really what differentiates us in our market. As customers have more and more of these distributed device populations, they face bigger and bigger challenges around how do I scale acquisition, deployment, service, support? That's really what differentiates us in our market. We get brought in by all kinds of different technology vendors, simply because we're one of the only partners they've got they can help a truly Tier 1 customer go acquire 200,000 devices, and get them deployed to 10,000 sites.

What are the biggest markets and vendors you are focused on?

From a customer standpoint, retail and retail supply chain, manufacturing and transportation—the combination of those three has really made up the bulk of our customer base for our whole company history. We've done work in health care, we've done work in education, but the core of our customer base and market is retail, manufacturing and transportation logistics. In those markets, we supply, service, support and integrate the technologies from partners like Zebra Technologies, Honeywell Technologies, Panasonic, Cisco, Aruba. Basically all of the leading vendors in mobile wireless and data collection. If they're in barcode or RFID, I probably do business with them. If they're in ruggedized mobile computing, I do business with them.

What has been the key that has enabled you to take this differentiated approach and not just be a typical reseller?

When somebody discovers a new piece of engineering or comes up with a new technology, I have a talent for recognizing the potential of that technology and what its barriers to adoption are going to be. Our core business is facilitating the technology disruption cycle. If the customer will let me, I will come in and not just change their business—I'll come in and change their whole industry and how it executes and operates through the application of technology. And it almost always starts with a very simple thing, which is visibility. If I don't have accurate real-time visibility of what's going on in all of my operational processes, then I have no chance of getting consistent results. And that's not going to scale and that won't be sustainable. And if your approach to solving the problem isn't scalable, repeatable and sustainable, well then you really just traded one set of problems for another set of problems. So you need to have a thoughtful, organized plan for how you're going to execute disruption through the application of technology. And that starts with understanding the requirements in the environment, and then having a thoughtful, organized plan for how you're going to do that consistently.

I'm always looking for the next disrupter--like Meraki, the wireless division at Cisco. We were a Meraki partner five years before Cisco bought Meraki. Because I recognized, before Cisco, that Meraki represented an architectural lead in the network, and that they were going to be a disrupter. They were going to drive down the cost of owning and operating large-scale networks by 50 [percent] or 60 percent. And a few years later, Cisco bought them for $1.2 billion. And now they're the future of networking at Cisco. So I'm always looking for those next disrupters. And I like to get in with them early. Because I can help them in a way that few partners can in those early stages. And then that positions me to ramp up and grow with them, once they become an industry standard like Meraki did in being acquired by Cisco.

What are you looking for in a partner program?

When I'm looking at a partner, to me, the key to whether their partner program is going to be successful or not is one, are they listening, and two,do they actually take action and corrective action on the feedback that their partners give them? When the partners say, 'Hey, here's what I need to win. Here's what I need you to do in order to facilitate my success’--do they listen? Do they try and do that or not? Because if they don't, then it doesn't matter what the channel partner program is, because it's all about them and what they want to sell. And it doesn't have anything to do with you or your business or your customers' needs. It's just about their number for the quarter.

What are your priorities for the coming year? Are there certain technology areas that you expect to focus more on? 

I ran through some of our divisions—that's where I've made some investments over the last two years. Accucode 3D was launched four or five years ago now. We just made up an acquisition this summer around Accucode 3D—we bought a service bureau business in Colorado called the 3D Printing Store. We launched Accucode Labs where we now created in-house capabilities around RF engineering. We can design and manufacturing antennas and arrays in-house. We can now design and manufacture electronics in-house—at remarkable speed and cost, unprecedented time to market. We've got a new Software-as-a-Service product that we launched earlier this year that's really starting to ramp up now called Jellyfish. That's our third commercial Software-as-a-Service offering. A little over a year ago, I sold a division called Velocity Mail to Descartes out of Canada for $26 million. That was our first Software-as-a-Service division, and that one was launched in 2003 and exited it just last year. Jellyfish is the latest one of those.

Could you tell me more about your Jellyfish offering?

Jellyfish is a cloud-based, collaborative vendor management and order management platform designed for retailers. You can go right now to the Android or iOS app store and go download Jellyfish for free. And you can start using it to order from all of your vendors. If you're a restaurant or a bar or a beauty salon or any place that has wholesale suppliers that you buy from on a regular basis, I built a free app for you to use to scan barcodes, enter quantities, create orders. And you can create all your orders on one screen for all your different vendors, and when you click send it takes all of those separate orders and divides them up by vendor and electronically transmits them, and then brings back confirmation on pricing and delivery. For instance, in the food and beverage space, the average restaurant does business with 30 to 40 wholesale distributors a month. And right now, every one of those suppliers has a different tool, different portal, different way that they would like for you to send them orders. And then the customer ends up using clipboard, pencil and fax machine, and email, and all of the old ways of doing things, simply because that's the only way they've got to actually deal with all the vendors the same way. The vendors aren't getting together to solve the problem together the same way. That's what Jellyfish is about. Jellyfish gives the suppliers the opportunity to all collaborate on solving the problem of customer engagement in order management the same way and all of a sudden. It's free to the retailer. For the supplier, depending on their order volume, they're going to pay between 20 and 60 cents per order. It's ramping up. We just launched it at the beginning of this year, and we've got our first commercial customers on it. It's taking off.

I wanted to go back to your AI division you mentioned earlier. How to monetize AI is a big question in the channel—how are you actually making money from AI?

Right now we're engaged with customers mostly on custom projects, where we're applying it out at the edge. We're working with some customers in logistics and workflow automation, taking video and image processing—so pictures and video from smart glasses and drones and cameras in an operation—and processing that and using an integrated chatbot to drive workflow behavior with the human resources involved in the process. That's one of the projects we're building right now in Ireland. We're about to do our first beta test of a drone that we just built, where it's a customized drone with a 900MHz RFID antenna array—a phased array—mounted to the drone with an AI processor on the drone so that we can track inventory items in a warehouse. The drone flies pre-programmed patterns in the warehouse and tracks all the inventory using RFID tags, down to plus or minus six inches.

In order to process all the data fast enough for performance—because the wide-area network isn't fast enough to do the backhaul and make decisions on and then come back out the edge—we have to push the AI processing of the data out to the edge. So there's a Nvidia graphics processor on the drone we built that's taking all of this RFID data and analyzing it so that we can push that data back up to the workflow environment.

This enables much faster tracking of inventory items?

Yes. I'm taking human beings out of the tracking and cycle count aspects of that warehouse inventory control environment. The customer for this application is a Tier 1 telecom company, and they're in the middle of their 5G deployment. They've got over $350 million worth of telecommunications equipment in their supply chain today. And most of it's sitting at third-party logistics facilities. And they really need to be able to keep track of that stuff and not lose it. And that's hard to do when it's not your facility. With this technology that we're deploying, the customer will now be able to monitor all their own inventory without having to have their third-party logistics partner do it.

What's your approach to remaining profitable with hardware?

It's funny because I know most of my peer competitors pretty well, and we talk. And consistently over our 25-year history, we have been able to hold on to slightly better margins—typically between 10 [percent] and 15 percent better—than how our industry vertical performs. We've been able to do that because of a focus on new technologies—so we're always on the edge. And No. 2, there's the attach rate on services. The focus isn't on the hardware itself. For instance, we just did a big deal with one of our largest customers, which is one of the largest grocery retailers in the world. They just signed a contract to deploy about 40,000 new ruggedized mobile devices. They have over over 5,000 operating locations in the U.S., and that includes manufacturing, warehousing, retail stores. And the challenge is that that is a lot of equipment. And they got an amazing price point, and we helped them negotiate that—we helped them get a better price from the OEM. And we helped them run the selection process, and we helped them run the competition to drive the price down and to get them a better deal. And they paid us for professional services to facilitate that whole cycle. So I'm actually helping the customer go drive down their hardware acquisition costs. At the same time, I'm able to hold on to better margins because of my service attach rate, and the fact that I'm focused on helping the customer solve their problems, not focused on selling stuff for my vendors. I tell my [vendor] partners all the time, 'I don't work for you. I work for my customer. Not once in 25 years has any of you ever sent me check.' Money only flows one way in this relationship. And they forget that often. They like to act like they're doing me a favor by letting me sell their stuff. And I remind them that they're doing business with me not because they wanted to, but because the customer said so.

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