How The iPad Transformed A 25-Year-Old Company — And A Much Older Industry

Ipad waitress

Photo: Flickr/Toby Simkin

The iPad is killing it in the enterprise — even in old stodgy industries.Thanks to Douglas Katich, the iPad is helping to transform food service distributors. And this in turn is transforming other industries.

Katich is CEO of a successful 26-year-old company, Ai2.

Ai2 makes order-entry software for the nation’s biggest distributors. It is used by 75,000 door-to-door salespeople to handle more than $75 billion in annual sales from restaurants, convenience stores, and groceries, as well as medical and beauty supply retailers and other types of businesses.

“I made a decision the first day I friggin’ saw an iPad. We weren’t going to port our software. We were going to design a whole new product specifically for this device,” Katich says.

This isn’t a leading edge industry. Salespeople might use laptops or old-school rugged handhelds to book orders. But to show off their deals of the week, they lug around binders of printed fliers — so-called “fat stack” notebooks. 

Can’t get more low-tech than that.

Typically, when Ai2 designs a new product, a customer pays “a lot of money” for the work, Katich says. But he was so struck with a vision for the iPad that he bankrolled the project himself. The iPad would do the mobile order entry AND replace the fat-stack.

“I bet the farm on the iPad. It was almost suicide for me. It was easily 30,000+ hours of development time plus you’re pulling your resources from customers,” he says. But he did it because “it is such a beautiful display tool. We could help out customers digitize all that content saving them tens of thousands of dollars in printing costs every month.”

Douglas Katich Ai2Douglas Katich, CEO of Ai2

Photo: Ai2

ProSel was born.Customers ate it up. It launched 10 months ago and Ai2 promptly sold licenses to its largest 40 wholesalers. If that doesn’t sound like much, consider that their iPads will capture “$50 billion in sales handling upwards of 100 billion transactions a year on this device.”

Even more crazy is that distributors are coming up with new uses for the iPads themselves. They are handing them to the retailers to use instead of phoning or faxing in orders. Many convenience stores still used Telxons, for Pete’s sake. Those are acoustic coupler transmitters popular in the 1980s.

“PCs came along, they didn’t replace Telxons with those. Pocket PCs and notebooks came along, they didn’t replace Telxons with those. They didn’t see the ROI. The iPad came along and they’ve leapfrogged. They are now using this beautiful device that’s a great business tool,” Katich laughs.

The iPad is bringing in new business that Ai2 never imagined. Watchmaker Bulova found ProSel on the App Store and called Ai2 out of the blue.  Earlier this month, Bulova signed a contract and is replacing laptops and paper with iPads and ProSel for its 60 salespeople.

Will Katich do the same for Windows tablets? In a word, no. If a customer wants this app on Windows 8  they’ll have to pay him to build it.

“Personally, I think Windows tablets are going to fail. I don’t think we’ll see any adoption above 10%.  Apple’s domination of the tablet market is going to be akin to iPod’s domination of the MP3 player market,” he predicts.

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