Yet Winebid.Com S Isolated IT Systems a Macintosh-Based Accounting System; a Single-User

Situation

WineBid.com is the largest online wine auction in the world. Since 1996, the company has provided a platform for collectors to acquire fine and rare wines on the Internet and for consignors and boutique wineries to sell their wine more efficiently than in other marketplaces. Unlike any other online wine auction, WineBid.com inspects every bottle stored in its three warehouses in California, Illinois, and New Jersey. During the summer months, the California warehouse may contain up to four months’ worth of auction inventory. Because WineBid.com moves between 8,000 and 16,000 bottles per biweekly auction, this warehouse may contain over 120,000 bottles of wine at any given time.

Yet WineBid.com’s isolated IT systems—a Macintosh-based accounting system; a single-user, Microsoft® MS-DOS®-based database; and an unsupported auction engine running on UNIX Solaris—constituted an expensive, inflexible, and unmanageable infrastructure that did not support the company’s corporate objectives. “We wanted to make it easier for customers to find a growing amount of product on our online auction, and we wanted to respond to consignors in a more timely and professional manner,” says WineBid.com Chief Executive Officer, Jerry Zech. “We also needed to make our business information available to our employees so they could work more productively.”

For example, the MS-DOS-based wine database required one person to spend hours assembling 10 account representatives’ manually compiled consignor lists into one master file, which he fed into the auction engine just before the auction opened. “There was no way for us to view this information, so we had no idea of how big the auction was and we couldn’t project revenue or budget,” says Zech. “It was like trying to fly a plane with your eyes closed.”

Solution

Assessing alternatives, WineBid.com initially looked at creating a new UNIX-based proprietary auction engine but decided that it would rather utilize the Microsoft® ASP.NET developer skills that it had in house and save U.S.$6,300 per month on UNIX developer fees.

“We also evaluated and rejected Linux,” says Zech. “Linux didn’t offer us any comfort down the road. We didn’t see much support, we didn’t see much of a developer community, we had no experience with it in house, and we had concerns about how difficult it might be to work with. Additionally, we did a Total Cost of Ownership (TCO) analysis and determined that with additional development, consulting, and maintenance costs, Linux was hardly the ‘free’ software we had first anticipated. This made a Microsoft solution even more compelling. We needed a standardized environment that our developers could fine-tune to our specific business needs.”

As a first step, WineBid.com turned to Microsoft Business Solutions reselling partner, Sensible Solutions.

“I realized that we had valuable customer accounting data that we could import into our auction engine and use to improve our auction business,” says Zech. “Sensible Solutions was very good at analyzing our business processes and suggesting ways to improve data flow. It deployed Microsoft Business Solutions—Great Plains® to provide a solid foundation for unifying our business processes—on time and on budget. It cost us a fraction of the estimate we had from UNIX.”

“WineBid.com wanted a strong core accounting package that it could easily extend using Microsoft technologies to work with the auction side of the business,” says Rex Bratton, President, Sensible Solutions. “Microsoft Great Plains is a high quality product that demonstrates Microsoft’s commitment to helping companies achieve not just a one-hit ROI, but ongoing business value.”

Then, working with Microsoft Consulting Services National Services Group, WineBid.com developed a plan to replace its other systems with Microsoft technologies. WineBid.com developed a Microsoft SQL Server TM 2000 data repository that contains individual descriptions, ratings, and reviews for 40,000 bottles of wine and is searchable by region and producer. Finally, it replaced its auction engine with SQL Server and ASP.NET applications running on the Microsoft Windows® 2000 Server operating system. The company’s new infrastructure constitutes an Enterprise Portal Framework that supports a new employee intranet portal called WineIN and a customer-facing Web auction portal with enhanced functionality.

“Our old Web auction supported approximately three to four bids per second, with no ability to increase,” says Nate Cluett, Director of Information Technology. “Our new auction engine easily supports 70 bids per second and is scalable to meet our needs. Standardizing on Microsoft technologies enabled our IT department to build a platform with the technological capabilities to support our corporate goals. Now, we control an IT environment that’s more secure and customizable.”

Benefits

WineBid.com’s Microsoft Enterprise Portal Framework enabled the company to lower costs, increase employee productivity, improve customer service, and increase revenue. “Microsoft integrated portal technologies completely transformed the way we do business. We are saving thousands of dollars a month in developer costs and hundreds of hours in employee time,” says Zech. “We’ve reduced our accounting staff from the equivalent of seven full-time employees to four. We are seeing a per-auction increase in revenue of approximately 10 percent and are getting great customer feedback on our new auction engine.”

Increased Productivity

By helping WineBid.com to automate business processes, integrate applications, and establish a new employee portal, the company’s Microsoft Enterprise Portal Framework has enabled significant increases in employee productivity. Instead of three people spending five hours on a Sunday night changing HTML pages, it takes approximately one minute for WineBid.com to close its auction. Previously, it was impossible for WineBid.com’s UNIX-based auction engine to communicate with VeriSign for credit card clearing, so it took one person six hours to bill the 1,000 to 1,300 winning bidders every two weeks. Now that this process has been automated it takes only a few seconds.

With the ability to access customer data through Microsoft Great Plains invoices, employees at WineBid.com are gaining valuable insight into customer behavior and can create targeted marketing plans. “We will be able to send personalized e-mail messages to customers for future auctions based on their buying habits,” says Zech. “We can actually link them up to their preferred products when the auction starts.”

Instead of working in isolation with incompatible systems, WineBid.com employees are collaborating on projects and accessing real-time business information to make better decisions. “Employees use the WineIN database to collaborate during the auction-building process,” says Cluett. “Account managers create an appraisal listing potential wines for a consignor. These appraisals are used by inspectors after the wines have been received by the consignors. Inspectors inspect wines in the system, verifying each bottle as it’s appraised, tagging each lot, and adding condition and description notes. Then an e-mail is sent automatically to the account manager responsible for the appraisal. He or she can view the inspected lots and use WineIN to schedule these lots for upcoming auctions.”

Because all of WineBid.com’s wine, customer, inventory, auction, invoice, and shipment data are centralized in WineIN, employees can use WineIN to search and view this information from any location. Wine vintage notes, producers, ratings, and reviews can be searched by keyword or any of several categories. Inventory and auction information can be browsed according to consignor or account manager. Shipments are viewable by date as well as by customer. “For the first time in our history, we have real visibility into our business,” says Zech.

Better Customer Service

Building a series of ASP.NET applications behind the scene has enabled WineBid.com to improve customer service. A new search engine allows buyers to query the database for products and to look at their purchase history. Consignors can see current bids on a live auction. “The old search engine didn’t allow customers to search by vintage, and we needed that capability,” says Zech. “The more easily people can find what they want; the more likely they are to make a bid.”

Consignors are also receiving more professional appraisals with better information about the expected reserve, its reviews, and the expected selling price. After the auction, consignors receive their statement within 2 two days, instead of 30.

“Microsoft provided us with a comprehensive set of portal capabilities and the platform to manage them at reduced cost and higher returns,” says Zech. “Now, there are no limits to our plans for the future.”

Microsoft Business Solutions

Microsoft Business Solutions offers integrated business applications and services that allow small and mid-sized organizations and divisions of large enterprises to connect employees, customers, and suppliers for improved efficiency. The financial management, customer relationship management, supply chain management, and analytics applications work with Microsoft products such as Microsoft Office and Windows to streamline processes across an entire organization, giving businesses insight to respond rapidly, plan strategically, and execute quickly. Microsoft Business Solutions are delivered through a worldwide network of channel partners that provide specialized services and local support tailored to a company’s needs.

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Microsoft Windows Server System

Microsoft® Windows Server System™ is a comprehensive, integrated, and interoperable server infrastructure that helps reduce the complexity and costs of building, deploying, connecting, and operating agile business solutions. Windows Server System helps customers create new value for their business through the strategic use of their IT assets. With the Windows Server™ operating system as its foundation, Windows Server System delivers dependable infrastructure for data management and analysis; enterprise integration; customer, partner, and employee portals; business process automation; communications and collaboration; and core IT operations including security, deployment, and systems management.

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