Originally focused only on storage, Magellan Software has expanded its technology offerings. The VAR developed its own applications, adopted QStar's Data Director, added document management, and entered into the application service provider (ASP) market.
Magellan Software, a vendor and VAR headquartered in Irvine, CA, has felt the pain of employing a new technology before its competitors. Ron Vangell, president and CEO, recalls the $25-million, 115-employee company's introduction to Java and Windows NT. "Being one of the first can be painful," he said. "A lot of the problems we encountered were fixed within six or eight months. But it also gave us the edge in those technologies because we were among the first."
Vangell is not afraid to take risks. In fact, he seems to thrive on it. That's why he's leading his company into the ASP (application service provider) market. Magellan experienced 55% growth last year, and this new step could be the key to continued success for the seven-year-old software company.
Magellan Software started out writing an interface layer (a connection between two systems through which information can be exchanged) to IBM's optical jukebox technology. "We engineered our optical data server interface to access the jukebox, but when we finished, we realized we needed to offer more software services," said Vangell. Magellan's SpyVision suite of document management products grew out of that need. Components of the suite include:
- SpyView – COLD/ERM (computer output to laser disk/electronic report management)
- SpyImage – document imaging
- StaffView – workflow
- SpyView Web – e-commerce enabler.
What Is An ASP?
An ASP can provide software services over the Web to a company that can't afford or doesn't choose to load core applications onto its own hardware. End users can either manage the data independently or have the ASP host and run the entire document management system for them. "Portal" is one of the newest buzzwords to describe the service an ASP provides. Vangell sees educating the market about ASPs as one of his biggest challenges. "We have to explain in layman's terms what a portal is and why it's important. A fleet manager in the transportation industry doesn't have time to research all of this."
Education is one of the necessary efforts when a new technology is introduced. Vangell recalls when he first started educating his clients about optical technology. "We had to convince professionals, like bank executives, that data was actually written to the optical disk. Then, they were concerned with its resilience. They thought you could actually shake the bits off a disk."
Magellan Software was a smaller company at the time, and spending the bulk of a sales presentation trying to convince an unbelieving audience was almost too much to handle. "What changed it all was CD-ROM," said Vangell. "We went from nobody knowing what optical technology was to everyone suddenly being an expert. We were very glad for that, though, because otherwise we might not have been able to continue our story. In just 30 to 90 days, our slides and data defending optical technology weren't needed anymore. We dropped those slides from the presentation. We no longer had to defend the technology."
VARs As ASPs Can Improve Customers' Cash Flow
Vangell finds much less resistance to the ASP model than what he experienced with optical technology. Already, Magellan has provided its client, Milan Express, Inc., a trucking company based in Milan, TN, with an ASP solution. The solution has improved Milan's cash flow by reducing the amount of time it takes to get information from the truck driver's hands to the home office.
"We've built software that resides on kiosks that are touch screen-enabled," said Vangell. "The kiosks are at public truck stops. Truckers pull in, get a cup of coffee, and then scan all of their bills of lading (receipts) and proof of delivery slips into the portal. The data is forwarded directly to the corporate office. The previous paradigm forced truckers to ship a physical package back to corporate headquarters."
Return on investment comes quickly with this type of system. Vangell added, "In the transportation industry, accounts receivable is huge. When shipping goods, the vehicles are out for extended periods of time. After payloads are dropped, paperwork has to make its way back to corporate headquarters. It can leave a large accounts receivable balance outstanding." Vangell said Milan Express reduced its accounts receivable by $400,000 a month.
Many people ask Ron Vangell if the company name derives from Ferdinand Magellan, the Portugese explorer who first circumnavigated the globe in the 16th century. Actually, Magellan Software's name came from a combination of Vangell's and his co-founder Ed Malley's names. But whether or not Vangell realizes it, with its history of entry into emerging technologies, Magellan Software seems to be following in the footsteps of the explorer.