Wine Meets Cloud: How a SaaS App Bottles Sweet BI

For small and medium-sized wineries, SaaS applications enable complex data management at bargain bin prices. Here's a look at how cloud is helping these customers.

By Kevin Fogarty
Mon, November 29, 2010

CIO — Cloud computing gives small and mid-sized businesses—even wineries—IT-enabled capabilities that they otherwise couldn't begin to afford. The tradeoff with SaaS solutions for the midmarket, however, is that customers usually have to accept relatively generic implementations and a small number of providers for their specific industries, says IDC research analyst Ian Song. Customization costs can add up.

The balance between cost and customization can be tricky. But both the customer and service provider can change the equation by taking advantage of the same advantages that make cloud economics work in the first place, says Pat Oates, CEO of three-year-old startup Wine Management Systems (WMS).

WMS is a SaaS provider whose applications are designed to track, automate and optimize the surprisingly technical and complex process of winemaking.

"There are 5,000 wineries in the United States, but most of them are really small and almost none of them can afford the $20,000 to $40,000 plus annual maintenance that traditional client/server wine-management software costs," Oates says. "We can charge $200 a month for a small winery, so they're not using something built in FoxPro or Excel."

Tracking Winemaking's Technical Side

WMS customers range from relatively simple operations that produce less than 2,000 cases per year to larger ones that produce tens of thousands. The wineries need to track and manage customer-management and incentive programs, marketing programs and other promotions, in addition to tracking and reporting the process of making and packaging wine.

"Every winery has to track and report when the wine came in, what chemicals were added and when, what kinds of blends they're doing, what was the number and name of the wines that were blended, the lot numbers for corks or caps and bottles. It gets to be a lot to try to track in a spreadsheet," Oates says.

"They have to produce a bioterrorism report with all the data on ingredients and packaging for the Tax and Trade Bureau (part of the ATF) and report lot numbers for corks and caps and bottles and everything to help with tracking," Oates says. "It gets to be a lot to track in Excel, but that's what most small wineries are using, but if they get audited, they're sorry it wasn't a more transaction-based system."

Oates system, built on Java, DB2 and Websphere, tracks and automates grape growing, inventory management, production and bottling and wine-club management, but didn't have analysis or reporting functions sophisticated or flexible enough for customers.

"Winemakers are a pretty opinionated group, so we'd finish one set of reports for one winemaker and go show it to someone else and they'd say 'no, no, I don't want to see it this way, I want to see it a different way,'" Oates says.

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