GCommerce offers electronic services that improve supply chain efficiency. It wanted to develop an application for the automotive aftermarket, which relies on special-order drop shipment for most transactions. To centralize inventory access and automate procurement, GCommerce implemented a cloud-based solution with Windows Azure  and Microsoft SQL Azure . By taking advantage of theVirtual Inventory Cloud  solution, distributors will have immediate, online access to a global parts supply. The virtual data warehouse is expected to increase sales and drive down costs. In addition, marketplaces worldwide can benefit from the highly scalable solution. GCommerce reports that with familiar development processes and Microsoft support, it was able to launch the new service in just 90 days. And by using SQL Azure and Windows Azure, GCommerce can focus on bringing innovation to the marketplace.

Situation

GCommerce is a leading provider of software-as-a-service solutions that improve supply chain efficiency. Located in Des Moines, Iowa, the company develops solutions for multiple industries, including automotive, consumer products, and healthcare. Its solutions are designed to help hundreds of trading partners across the supply chain overcome technology barriers and share information in real time.

Today, an end-to-end special order takes 15 seconds instead of 15 minutes, thanks to Windows Azure, SQL Azure, and the Virtual Inventory Cloud from GCommerce.   Steven Smith President and Chief Executive Officer GCommerce

Since it was established in 2000, GCommerce has served the automotive aftermarket industry, which encompasses all products and services purchased after the original motor vehicle sale. The automotive aftermarket is valued at U.S.$300 billion, representing a significant opportunity for the company, which already handles approximately 30 percent of industry purchases made electronically.

According to Steven Smith, President and Chief Executive Officer at GCommerce, 80 percent of the transactions processed in the automotive aftermarket generate just 20 percent of the revenue. “The challenge today is that most of the orders processed by retailers and wholesalers are drop shipment special orders,” he says. “They are placed randomly by phone, by fax, or through websites, and there is no procurement model in place.”

Special orders are especially prevalent in the aftermarket industry. Automotive retailers and wholesalers face pressure to reduce inventory costs. As a result, they limit their inventory to parts with high turnover, and rely on drop shipment to have suppliers deliver special orders directly to customers. It is also difficult for them to maintain a comprehensive inventory. “The automotive aftermarket is a long-tail industry with millions of parts,” says Smith. “It’s not possible for any one retailer or wholesaler to stock them all.”

Special orders are costly and time-consuming in any industry. “Think about all the vertical marketplaces around the world that are processing random orders at an estimated $6.20 per paper transaction,” says Smith. “How many billions of dollars are wasted every day?”

To improve access to automotive aftermarket parts, GCommerce implemented a business model with 200 national wholesalers and retailers that function as distribution hubs. The hubs are electronically connected to more than 1,000 suppliers and 2,500 brands in the United States that in turn sell parts to smaller retailers.

The company wanted to streamline the process further and drive up the profitability of drop shipment special orders. It hoped to create a virtual, cloud-based inventory to speed inquiries and procurement worldwide. GCommerce considered building an on-premises server farm to house the project, but it decided that would be too costly. “We looked at the millions of dollars it would cost to build a data center,” Smith says. “We had to decide if we wanted to be in the business of building infrastructure or creating innovation.”

One of the biggest technical benefits we saw with Windows Azure and SQL Azure was the ability to maintain and grow our solutions without the distraction of implementing new infrastructure.   Jason Popillion Chief Technology Officer GCommerce

In the end, the company decided to adhere to its core business model and look for an alternative to building its own data center for cloud-based services. Smith says, “It didn’t make sense to become an infrastructure company when our specialty is creating transformation through business rules and data management.”

Solution

GCommerce considered several options, including an offering from Amazon. However, the company felt that Amazon lacked the flexibility needed to meet the unique needs of the automotive aftermarket industry. Smith says, “We wanted to use the existing channels of retailers and wholesalers and provide what Amazon couldn’t offer—an almost unlimited availability of supplier inventory.”

The company decided that a solution based on the Windows Azure cloud services operating system and Microsoft SQL Azure was the best choice. The Windows Azure platform, which includes Windows Azure, SQL Azure, and other services, is a scalable environment that offers on-demand compute and storage through Microsoft data centers. The solution offered several advantages compared with options from other vendors, including better flexibility and simplified administration. Jason Popillion, Chief Technology Officer at GCommerce, says, “One of the biggest technical benefits we saw with Windows Azure and SQL Azure was the ability to maintain and grow our solutions without the distraction of implementing new infrastructure.”

The Windows Azure platform also made sound business sense. GCommerce deployed a large-scale data warehouse called the Virtual Inventory Cloud that gives buyers immediate access to a global inventory of aftermarket parts. The solution is highly scalable, and the company pays only for services consumed. As a result, GCommerce can scale up or down as needed to handle traffic spikes without needing to purchase infrastructure that would sit idle during off-peak times. “With the solution we created using Windows Azure and SQL Azure, we can populate our data in such a way that we can scale the load up or down as needed,” says Popillion. “We can scale across multiple nodes and keep data easily accessible, and the pricing model accommodates fluctuating transaction rates.”

GCommerce reports that the implementation was also easier than expected. Although the team had not worked with the Window Azure platform before, it was ready to launch the solution in 90 days. “We had many pleasant surprises when developing the Virtual Inventory Cloud,” says Popillion. “We found we could develop a cloud-based application using our existing development skills and database partitioning models—the learning curve with Windows Azure and SQL Azure was very small.”

SQL Azure is a perfect solution for housing inventory data, in contrast with a traditional data warehouse model. We can post data to a common repository that has huge scalability and redundancy.   Jason Popillion Chief Technology Officer GCommerce

With single sign on, parts buyers can use the same set of credentials for all GCommerce applications, including the Virtual Inventory Cloud. They log on to the Virtual Inventory Cloud through an interface designed with the MicrosoftSilverlight  browser plug-in. Then web services retrieve inventory data stored in SQL Azure. The solution interoperates with Microsoft BizTalk Server 2009 Enterprise, which runs on-premises at the company’s data center in Des Moines, Iowa.

GCommerce uses a strategy of software-plus-services both on-premises and in the cloud to meet customer needs. With BizTalk Server 2009, GCommerce helps trading partners who have disparate systems exchange information by converting documents and other files into compatible formats. When a buyer orders a part from the Virtual Inventory Cloud, the on-premises solution sends a purchase order in the appropriate format to the part vendor’s business system.

In May 2010, GCommerce released a pilot version of the application to 10 enterprise wholesalers and suppliers, and demand is rapidly increasing. The Virtual Inventory Cloud, by design, is able to grow to more than 1 trillion rows of data and more than 1.5 terabytes. The highly scalable and interoperable solution applies to other industries besides automotive, such as hardlines retailing and specialty markets. Smith says, “Because it is based on the Windows Azure platform, the Virtual Inventory Cloud is a solution that is adaptive to virtually any supply chain in the world.”

GCommerce already plans to enhance the solution with more features. For example, it will take advantage of Microsoft Communications Server “14” to connect a telephony system with the Virtual Inventory Cloud. Buyers will be able to enter a part number through voice recognition or their phone’s keypad to check inventory and place an order.

The company also plans to move more solutions to the cloud. “From a technology perspective, we will continue to grow our solutions on the Windows Azure platform,” says Popillion. “Microsoft cloud services  are very important parts of the GCommerce technology stack, because we can scale out solutions worldwide at a moment’s notice.”

Benefits

With its Virtual Inventory Cloud based on Windows Azure and SQL Azure, GCommerce expects to streamline and transform supply chains worldwide. The centralized, highly scalable solution was easy to implement with Microsoft support, and GCommerce can focus on bringing new solutions to the marketplace.

With Microsoft and the Windows Azure platform, we can collectively change an entire industry and move it from a random process to a systematic solution in a tenth of the time, with a tenth of the people, at a tenth of the cost.   Steven Smith President and Chief Executive Officer GCommerce

Transforms Supply Chain

GCommerce is betting big that the Virtual Inventory Cloud will continue to transform the distribution supply chain and improve the profitability of special orders. For example, Smith points out that retailers and wholesalers want to reduce inventory overhead but increase sales. “Now people can have access to an almost infinite supply without adding costs to their existing operations,” says Smith. “The Virtual Inventory Cloud with SQL Azure and Windows Azure is the best of both worlds—it drives top-line revenue and reduces bottom-line costs.”

The cloud-based solution also streamlines the supply chain by reducing manual processes. “We can be transformative,” says Smith. “We can bring solutions to market that change the very nature of the way the supply chain works. Today, an end-to-end special order takes 15 seconds instead of 15 minutes, thanks to Windows Azure, SQL Azure, and the Virtual Inventory Cloud from GCommerce.”

Completed in just 15 seconds, special orders are now 60 times faster—a dramatic improvement in efficiency. Buyers who had abandoned transactions because of manual and time-consuming processes have returned, and customer loyalty and retention rates have improved. Smith says, “We are creating sales that might have potentially been lost.”

The benefits extend to customers at all points in the supply chain. For instance, consumers can have confidence that the parts they order through websites are truly available. “Our solution is radically different,” Smith says. “We can give customers—whether they walk in the door or shop online—access to an almost unlimited inventory. Instead of placing an order and hoping it can be fulfilled, they will know that the part is in stock and that they will get their order.”

Improves Business Agility

To create an effective solution, GCommerce needed a way to centralize access to inventory. The Windows Azure platform made it possible for the company to offer a virtual data warehouse to distributors around the globe. “SQL Azure is a perfect solution for housing inventory data, in contrast with a traditional data warehouse model,” says Popillion. “We can post data to a common repository that has huge scalability and redundancy, and we can port that worldwide almost instantly.”

Simplifies Implementation

GCommerce says it was surprisingly easy to develop a solution that could have such a significant impact on worldwide supply chains. “While we developed the Virtual Inventory Cloud, common tool sets were very important to my staff,” says Popillion. “We could use some of the same base code we had already developed for other projects and seamlessly import it to SQL Azure.”

Enhances Innovation

By offering its new Virtual Inventory Cloud solution, GCommerce is changing the playing field of the automotive aftermarket industry. “We can be agile and change the behavior of the supply chain,” Smith says. “Instead of focusing on legacy methods such as processing orders through the phone, fax machines, and websites, we can actually think about transformation. In short, this solution based on Windows Azure and SQL Azure allows GCommerce to be in the business of innovation rather than the business of building infrastructure.”

By building on the Windows Azure platform, GCommerce can focus on bringing new solutions to the marketplace. Smith says, “With Microsoft and the Windows Azure platform, we can collectively change an entire industry and move it from a random process to a systematic solution in a tenth of the time, with a tenth of the people, at a tenth of the cost.”