By Nick Patience
Blue Martini Software Inc has just started shipping version 2.0 of its web-based merchandising and commerce system and is shortly to announce its second round of funding. The San Mateo, California company founded last year by Monte Zweben, who founded Red Pepper Software Inc which he later sold to PeopleSoft Inc, has been funded by Zweben and his board until it raised $5m in March from Matrix Partners. The new round, of $12.5m is from new, as yet unnamed, investors.
Blue Martini has five customers signed for its e-merchandising system, but it’s not a trivial application, starting with a $650,000 price tag and most implementations topping the $1m mark. However, only one of them – Levi Strauss & Co – has the system running at the moment, with the others including Gymboree and Mean’s Wearhouse, intending to go live in the fall, according to Bill Evans, VP marketing at the company.
The e-merchandising system offers the ability to construct web stores, handle the financial transaction, organize the management, track the customers, produce targeted offers and so on. The new version has added a new module, making six in all. The company has now separated out content management as a separate module – it was previously handled within the merchandising module. By content the company means both images and descriptions of the product, plus reviews, informational videos and so on.
Blue Martini’s five other modules are customer management; merchandise management; web store operations; micro marketing and tools. Various enhancements have been made to the other modules, including load balancing between application servers as well as web servers.
Interestingly, Blue Martini finds itself not only going up against commerce software companies like Open Market Inc, but also against Broadvision and Vignette, companies better known for their publishing systems. For instance it beat Broadvision and ATG to win a deal with Gloss.com, an online beauty store that will be launched soon, which is running Blue Martini on Sun boxes and an Oracle database. Gymboree runs it on Compaq NT boxes and Microsoft SQL Server and Men’s Wearhouse chose it above Broadvision, Vignette and Open Market and plans to run it on Sun and Oracle. It will go live this winter.
Blue Martini doesn’t claim to be able to do everything a web store will need, but Evans claims it does a lot more than the likes of Open Market, which he says just handles the transaction element of e-commerce. For instance, for payment processing Blue Martini partners with CyberSource and for taxation software with Taxware. It links into various call center applications, syndicated databases, such as Equifax and point of sale systems, which are often homegrown.
Blue Martini has licensed Crystal Reports from Seagate Software Inc for companies that might not have their own reporting tool, but those that do can still use any ODBC-compliant tool. Because the system controls its own OLTP schema, data can easily be transferred to a data warehouse without losing any semantics of the data, says Evans. In other words the data doesn’t have to be cleaned by a separate tool and then the warehouse assembled separately. The company has also licensed Fulcrum Technologies Inc’s text search engine. It chose Fulcrum because it has a Java API and Blue Martini’s system is all written in Java.
Blue Martini’s business model calls for 80% of revenues to come from software licensing and the rest from services, so the company intends to partner with some services companies soon, as well as design specialist, such as Gray Interactive. Future directions for the company include the possibility of moving into the financial services and telecommunications services arenas.
