Smith-Gardner customers crowded a posh South Florida resort to critique their application supplier and learn how the company will take them onto the Web. The meeting of the S-G 2000 Conference and Expo showed an application changing as much as the prospects of the HP 3000 at its heart. It also showed off customers using the solution that’s sold more new systems than any other application in the past year.

In a broad meeting room filled to capacity with managers and CEOs who use the S-G software, day-glo plastic clappers were in motion. Hundreds of mock hands on short handles clapped when shaken, voicing the approval customers felt for dozens of improvements promised to their application, software powering some of the best-known businesses relying on HP 3000s.

In those moments of enhancement announcements, it was easy to believe Smith Gardner would be able to carry its customers into the world of e-commerce. More than a few of them were name-brand companies, the kind easily recognized by analysts and industry experts who don’t know the HP 3000’s success at all.

That 3000 recognition didn’t appear to register with most of the 500 attendees assembled in Aventura, Florida in the first week of June. Nearly all of the 300-plus companies on the Smith-Gardner customer list rely on the HP 3000, but most in Florida were far more interested in the new features and familiar foibles of their business-critical application.

That app is known as MACS to most of them, but Smith-Gardner was changing that with its announcements at the conference. The Mailorder and Catalog System is becoming Ecometry, a makeover replete with reliance on non-3000 platforms and software. Smith-Gardner wants to attract larger companies with its new Knowledge Base functions, a data mart with retail potential.

But the transition to a bigger customer base is taking its toll on current sales. After the conference, the company reported to investors that it expects to have an unprofitable quarter for the period ended June 30, its first red ink since becoming a public company early in 1999. While financial analysts were predicting a 10-cent-per-share profit, a Smith-Gardner report on June 16 forecast a loss of 10 cents per share. S-G officials told investors sales have been delayed because its larger prospects are taking longer to buy.

“The dot-coms will be less of a priority in terms of our target market,” said marketing VP Sharon Gardner. “We’ll be going after the traditional brick and mortar retailers in terms of the e-commerce marketplace.” Traditional catalog companies remain the majority of the company’s clients.

Praise for the platform

It didn’t take long in the four-day conference to find public praise for the HP 3000. Don Libey, a consultant to an investment firm that buys and sells catalog companies, uttered the first mention in his keynote speech covering how the catalog business had matured.

In the database revolution of the industry, Libey said companies began to buy “HP 3000s, the most wonderful thing that ever happened in this whole industry. We actually got hardware that was reliable and worked, and we could load up all this information, and we had people who were responsive.”

Libey’s speech offered religion for the Smith-Gardner customers, the belief that adding technology would make them ready to help their buyers serve themselves through Web sites. “Profitability margin will be your primary concern,” Libey said. “And if you don’t begin using technology to preserve margin, you will be a people-intensive, non-technological dinosaur.”

With a call to action ringing in their ears, the customers heard from HP about why HP and its e3000 are important to their industry from HP’s worldwide marketing manager for the platform, Christine Martino. Referring to “our feisty new CEO,” Martino said “Carly Fiorina has come in and tried to make us a presence, work on our brand and say who we are. We’ve always been people with top technology, so let’s harness that and see how we can change this company a bit to move at Internet speed.”

Martino explained that HP had too many product brands before Fiorina’s reinvention of the company. The new campaign of HP Invent lets the company “take all those pieces and see what incredible things we can do for our customers.” She bragged on the 3000’s successes in Fortune 25 (more than half use the system), the 50 dot-com companies making use of the e3000, and the six new airlines signed in the past six months for the OpenSkies e-services model. The Fortune 25 mission-critical use means “it’s a pretty mainstream system,” she said.

Customers converting

While the HP 3000 reputation may seem well known to much of its customer base, the Smith-Gardner sites include some who are brand new to its merits. It was not difficult to locate companies at the conference who had converted from other systems to HP 3000 use, especially from the IBM midrange alternative, the AS/400. A software application called Mozart was often listed as the program that got the gate in favor of the S-G solution, usually for scalability failings. Stuben Glass made its migration directly from the AS/400, a transition that IT supervisor Keith Gustin was glad to have behind him.

Tony Weist, the IS Manager at art and printing supply catalog Daniel Smith, moved his company’s catalog system from IBM Unix servers to the 3000 last year. The Smith-Gardner MACS solution was in the highest price category among his finalists, but Weist said that his CEO wanted a superior solution to match sales growth at Daniel Smith.

Like many converting from other platforms, Weist was working at learning the lay of the 3000 land as well as new features of his application. His CEO attended a separate luncheon where Libey facilitated a roundtable discussion about implementing technology. Meanwhile, Weist wanted answers about a lower-cost compiler alternative for his Series 929, since the $7,000 he got quoted was too steep.

Weist was one of several attendees at the show who resisted implementing a solution on an NT platform, for reliability reasons. He also noted that Smith-Gardner’s sales efforts suggested NT as a platform for his company. Like more than a few attendees, Weist was hungry for information on tools to use in his newly adopted environment.

Changing architecture

For the technically minded, the conference offered a look into the changes S-G is making in its platform choices. Rich Smith, principal staff engineer for the Ecometry solution, explained why Oracle databases, to be hosted on NT or Unix servers, will become an integral part of the Smith-Gardner application within a few months.

“We’re providing a real-time data mart using relational databases for reporting purposes, separate from the transactional server,” Smith said. “All those marketing reports that cross tables and bring your HP to its knees trying to run will now be off on a different system altogether.” Ecometry’s Knowledge Center will supply “a huge number of canned reports, plus the ability to do ad hoc queries.”

The next phase, beyond the Knowledge Center rollout, is the Parallel Web Shopper, which also uses computing engines other than the 3000 to capture transactions from Web surfers. Updates to shopping carts or browsing of items won’t result in “millions of transactions hitting your back-end [3000] server each time,” Smith said. Orders are still sent to the 3000 in this version of Ecometry when transactions are completed.

If the offloading of processing seems to leave the 3000 dependent on Oracle front ends, it also gives the 3000 systems a backup in case of failures of the server or the network between Web servers and the 3000. This kind of failover capacity is new to Smith-Gardner sites. But Smith said that another motivation for putting Oracle in front of the 3000 was prospective customers’ unfamiliarity with the reliability, performance and scalability of IMAGE/SQL and the HP 3000.

“In the eyes of the outside world, the biggest thing our competitors do to us is say we’re not scalable. They say one box can’t handle all those transactions,” Smith said. “Those of us who really know the HP and the capacity of it as a transaction server know it can handle it. But the whole world doesn’t know that. This allows the system to scale so much more.”

The architecture which relies on what Smith-Gardner calls e-business servers for front-end processing is scheduled to appear this fall. Another phase, which doesn’t have a timeframe for release yet, adds e-strategy Campaign and Content management modules, also hosted on Oracle databases.

“The programs can be tweaked to take advantage of relational database capabilities,” Smith said. The company will give customers more than one way to deploy Ecometry, using IMAGE/SQL exclusively or in conjunction with Oracle databases. Gardner said the company has secured less costly runtime licensing for its customers who will use the Oracle database.

Predicting sales

As S-G customers expand their sales from catalogs to Web sites, they look forward to the sophistication online sales can bring. In a packed session on the Predictive Response features of the software, customers learned how online retailer Club Mac has increased average order size by 20 percent by offering related items during a sale.

In a live Web demo, product manager Karen Klein browsed the Club Mac Web site to show how purchasing a Mac iBook computer brought up recommendations for memory, peripherals and software. In the upcoming 5.2 version of Ecometry, sites can flag products as consumables, such as printer cartridges, so they can be recommended multiple times.

Klein told the customers that she checks on the performance of the software by browsing clients’ sites. She added that she purchases from the sites, too: A new cat pooper scooper on Thatpetplace.com landed in her basket, an item which used disposable bags. Replacement bags came up at the top of items recommended by the Predictive Response module, she said. “I got caught by my own recommendation engine,” she said. “Whether it’s Pottery Barn or the call center person who’s talking to me, if you guys get me on the phone and cross-sell to me, I’m buying.”

Ecometry is designed to be aware of a retailer’s multiple channels, she added, a feature that illustrates why Smith-Gardner has renamed the product and is reaching for more traditional retail outlets. If a customer has already purchased a product through a telephone call, a Web site order won’t recommend that product as an add-on. Smith-Gardner intends to deliver point-of-sale capabilities to add another channel to its retailers’ options.

Close customer contact

As a company whose products are designed to enhance customer relationships, Smith-Gardner pulled out all the stops to make attendees comfortable. Hosting its conference in a hotel with oversized suites and an Atlantic beach club was just the beginning. An all-day fishing tournament was the first event, and the winner (an S-G sales rep out with a customer) hooked a 70-inch, 150-pound mako shark. HP hosted a martini and cigar reception at the end of the first day of sessions, with a cigar roller turning out stogies for all attendees. A beach party on the second night was punctuated by S-G staffers tossing the company’s new Chief Operating Officer John Marrah into a pool at the club.

At lunches and breaks, S-G staff — more than 150 were on hand during the show — could be seen taking feedback on the vast and complex application that has become Ecometry. Prospective customers from HotTopic.com, a dot-com which sells band t-shirts online as well as in its 250 stores around the US, quizzed S-G customers about support performance and conversions.