Infor puts $25m in retail big data play Predictix

Profile picture for user pwainewright By Phil Wainewright January 18, 2016
Summary:
Infor has invested $25m in cloud vendor Predictix, which brings retail big data analytics smarts into its CloudSuite retail management solution

Fresh vegetables in produce store © littleny - Fotolia.com
Enterprise applications vendor Infor is doubling down on its retail industry ambitions with a $25 million investment in retail data analytics specialist Predictix, it has revealed today.

Predictix helps retailers solve complex problems in demand forecasting, merchandising and assortment management. It does this by applying sophisticated data science and big data analytics running in the cloud. This means retailers can interpret the massive data generated by the volumes of product they handle, as Infor president Duncan Angove told me by phone earlier today:

One of the challenges the retail industy has faced is that volumes in this industry are dramatically vaster than in others.

Predictix has solved that by leveraging big data and applying very advanced machine learning.

Retail innovation

The company has brought innovation that is shaking up an established function in the retail industry, says Angove.

We've known the Predictix team for a while. It's an example for me of pure innovation on a scale I haven't seen for a long time.

Forecasting in retail is a pretty mature space. A lot of retailers have departments that do nothing but predict demand.

Predictix has been able to improve forecasts by 25-50% in terms of forecast error. Even in a mature, well-proven space like forecasting, they're fundamentally transformative.

Based in Atlanta, Predictix says its SaaS subscription revenue grew by more than 40% in 2015 and it manages weekly forecasts for its customers of more than $60 billion in total.

As a highly configurable cloud solution that is designed for rapid implementation, Predictix will add to Infor's value proposition for the retail industry, says Angove. He cites its track record with top-tier retailers of rapidly implementing complex solutions such as assortment planning — the process of selecting and deciding how products are put on sale to maximize turnover and profit. Predictix also offers demand forecasting, merchandize financial planning, supply chain network flow optimization, and allocation and markdown optimization.

Whole Foods Market collaboration

The Predictix software plays an important part in the CloudSuite retail management solution Infor is currently developing in close collaboration with upmarket US grocery chain Whole Foods Market. Whole Foods already uses Predictix for forecasting, planning and optimization, the results of which will feed into the core merchandizing solution that Infor is developing for the grocery business. One aim of the collaborative development project has been to ensure the two vendors' applications work together in a seamless way, says Angove.

The investment means Infor will have more influence over the direction of future development at Predictix, according to Angove:

W'ed already been working with them over the last nine months. Now that we've taken this investment we have a greater ability to shape their roadmap.

Under a new strategic partnership between the two vendors, Infor will become a reseller of Predictix solutions, which it will deploy, manage and support in the Infor cloud (which runs on Amazon Web Services).

Infor also plans to integrate Predictix and its own retail management suite with GT Nexus, the global trade and supply chain management platform it acquired last year for $675 million. Providing visibility into a retailer’s extended supply chain, the system will recommend responses to disruptions in the supply chain to minimize stock-outs and other adverse effects.

With its minority stake in the company, Infor joins existing Predictix investors Marlin Equity Partners, Kinetic Ventures, and ITC Holding Company. In a press statement, the company's CEO Molham Aref hailed Infor's enterprise scale and entrepreneurial mentality.

My take

Although not an outright acquisition, this investment gives Infor more influence over an innovative company that adds real juice to its retail management solution. It's a sensible move to help safeguard the significant competitive edge Infor seems to be building for its next-generation retail offering.

Image credit - Fresh vegetables in produce store © littleny - Fotolia.com.

Disclosure - At the time of writing, Infor is a diginomica premier partner.