QAD Inc. Chief Marketing Officer Interview: Gordon Fleming

• On 1:53 pm EDT, Tuesday August 25, 2009

67 WALL STREET, New York - August 25, 2009 - The Wall Street Transcript has just published its Application Software Report offering a timely review of the sector to serious investors and industry executives. This 111 page feature contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: Upgrade Cycle for Application Software -- Software as a Service -- Cloud Computing -- Virtualization Software -- Government Software Sales Cycle -- Demise of Unix -- Installed Base of Microsoft Software -- Installed Base of Oracle Software

Companies include: Microsoft (MSFT); VMware (VMW); Oracle (ORCL); RedHat (RHAT); Sybase (SY); Google (GOOG); Symantec (SYMC); Avocent (AVCT); Novell (NOVL); SolarWinds (SWI);CommVault (CVLT); Data Domain (DDUP); IBM (IBM); SPSS Inc. (SPSS); Steel Vault (SVUL); StrikeForce Technologies (SFOR); Jagged Peak (JGPK); Lyris, Inc. (LYRI); Saba Software, Inc. (SABA); TTI Team Telecom International (TTIL); AMICAS, Inc. (AMCS); Sonic Solutions (SNIC); BluePhoenix Solutions Ltd (BPHX); ArcSight, Inc. (ARST); Etelo, Inc. (ETLO); Pansoft Company Limited (PSOF); Exobox Technologies Corp. (EXBX); PROS Holdings, Inc. (PRO); Proginet Corporation (PFGF); Versant (VSNT); Wyndstorm Corp. (WYND); China Digital TV Holding Co. (STV); QAD Inc. (QADI); Magic Software Enterprises, Inc. (MGIC); Wizzard Software Corp. (WZE); SXC Health Solutions Corp. (SXCI); Telvent (TLVT).

In the following brief excerpt from the 111 page report, Gordon Fleming, Chief Marketing Officer of QAD, Inc., discusses the company and the outlook for the sector and for investors.

TWST: Would you begin with a brief historical sketch of the company and a picture of the things you are doing at the present time?

Mr. Fleming: QAD was established in 1979. We were set up to build software that helps manufacturers control all aspects of their businesses. We deliver Enterprise Resource Planning software. Everything we do today is focused on addressing the needs of global manufacturers in six vertical industries: high technology, industrial, life sciences, consumer products, food and beverage, and automotive. Our organization consists of approximately 1,200 people; we operate directly in 26 countries and have customers in 90. Our software is used in over 5,000 manufacturing plants worldwide.

TWST: Would you tell me a little bit about some of the key members of the QAD team?

Mr. Fleming: We are very proud of the founders of our business. Pam Lopker and her husband, Karl Lopker, are very much involved in the day-to-day business. Pam Lopker, our President, heads our research and development operations. Karl Lopker is our Chief Executive Officer. Pam had a vision for integrating manufacturing, distribution and financial systems, and focusing on open systems when we founded the business. In 1984 we launched our core product, then called MFG/PRO, which remains at the core of the QAD Enterprise Applications suite today. We have a considerable number of executives with long tenures at QAD, with tenures of 10 years being common. I've worked for QAD for 15 years myself. And on our external board, we have great representation from people like Peter van Cuylenburg, Lee Roberts, Tom O'Malia, who come to us with considerable experience, including executive posts in other major companies. We also have several board members who have run sizable global software businesses themselves.

TWST: Would you describe the outlook for the industry in general and for your company in particular right now?

Mr. Fleming: Certainly from a macro perspective, we are very much entwined with the fortunes of manufacturers. So in the current economic cycle we have seen the impact of the economic downturn in various degrees with different customers. So for example, the demand for passenger cars has significantly dropped. That has obviously had an impact on customers in that space. We have also seen some areas of our marketplace relatively unaffected. Our customers that manufacture food and beverage have not been significantly impacted by the current economy. What we are seeing is a relatively short aberration in the general trend, while some of our customers are adjusting and restructuring their businesses to accommodate changes in the demand for their products. Some customers are, in fact, growing as a function of that market change. But if we look at the longer scale, really what we see is that there is a new generation of users entering the workplace. When we started marketing our software applications in the late 1970s/early 1980s, then very often you would have an individual responsible for recording transactions. A slightly more senior person might generate reports on those transactions and a manager or person in a supervisory role would then interpret that data. Today, we're seeing those roles more often conducted by one individual. Users now expect that whenever they use any system, that it has a great design concept of affordance and they should be able to walk up, understand what the system does and use it without significant training or challenges. So for us, we really feel that the biggest challenge we have today is delivering a system that has more evolved requirements for what we call the new generation of ERP users. That's a significant focus. We also have a long-range vision for manufacturing that revolves around lean operations and practices, but everything we have done since our foundation has been about helping manufacturers improve the efficiency of their businesses. We see that a lot of the efficiencies for our customers' facilities come from improving internal operations. A lot of the efficiencies that manufacturers will yield will be through better collaboration - faster, real-time collaboration. As a software provider, we take the concepts of lean manufacturing and look at those over a complete supply chain. We call this future state the "perfect lean market," where products are made on the demand of a customer, products that pulled through the entire supply chain with minimum waste and maximum speed. We think that will be the new paradigm for manufacturers, and that drives a lot of our development direction and really gives us a long-range target ahead. So pretty much everything we are doing on the product development side is aimed at helping make it more efficient for people to move products through their supply chains.

The Wall Street Transcript is a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs and research analysts. This 111 page special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online .

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