Retalix: Deal with British Petroleum is Tribute to the Company's Vision

Mar.30.07 | About: Retalix Ltd. (RTLX)

Earlier this week Retalix Ltd. (NASDAQ:RTLX) announced a deal with oil giant British Petroleum [BP]. This latest deal tells Retalix's story in the simplest and most succinct fashion. BP chief information manager, convenience retail Ed Alford said when the deal was announced:

In a need to implement IT solutions that will reduce operational costs, we looked for a platform that is both robust and flexible. We have sought to implement common business processes and a common architecture to drive operational excellence at reduced operating cost. The Retalix solution provides BP with the functionality needed to support the expanding business of our fuels sites, convenience stores and quick service restaurants.

The Retalix system will enable BP to monitor and control its retail operations worldwide. The question that must be asked in this regard is how this is done at the level of customer demand. The answer is that Retalix has achieved this through many years of technological research and trials, which on the one hand enable the collation of all requisite information for monitoring retail activity, while relaying processed and comprehensible data to management on the other, so a tool like this becomes an inseparable part of the management systems at giants like BP. For Retalix it is a great leap forward, and opens the door for it to the top tier of global corporations.

As far as I know, it has never received any projects before from companies of the likes of BP, and the latest deal is like a U.S. Food and Drug Administration [FDA] endorsement for a drug, no less. Barry Shaked, the founder and the man leading Retalix, certainly thinks so and is quite justifiably proud of this agreement. You all know that I have believed for some years that Shaked is one of that breed of managers who know what they want and how to achieve it; an extremely rare species here in the holy land.

If someone had told you 10 or 30 years ago that convenience stores (which is actually a posh name for a grocery store or corner supermarket), would be networked with IT systems, you wouldn't have believed that it could happen, mainly because you wouldn't have understood what a grocery store had to do with information transfer. Shaked, however, realized that the days of the cash register at the till at the entrance of every store, the old NCR machines that never broke down, were a thing of the past.

I believe Shaked, who once told me that he no thoughts about selling Retalix, and I also feel that the company is operating in a niche in which, from its perspective, the sky is the limit, a huge niche of which a tiny percentage already uses solutions like those that it develops. It may well be that in the future, as happened with M-Systems, Shaked will have no alternative but to sell Retalix, but the price will be entirely different then.

For a moment I thought, given the results for last year, that Retalix might be lagging behind the competition, but after the announcement of the deal with BP earlier this week it is now clear to me that the company is in the front line in this race. The only problem that I see at present is the fact that Shaked has also taken on the management of the U.S. subsidiary, and that will be tough, even for him.

RTLX 1-yr chart

Published originally by Globes [online], Israel business news -
© Copyright of Globes Publisher Itonut (1983) Ltd. 2006. Republished on Seeking Alpha with full permission.