Transcript of a sponsored discussion on how Sky I.T. has changed its platform and solved the challenges around variety, velocity, and volume for that data to make those better insights available to retail users.

1. How SKYPAD and HPE Vertica Enable Luxury Retail
Brands to Gain Rapid Insight into Consumer Sales Trends
Transcript of a sponsored discussion on how Sky I.T. has changed its platform and solved the
challenges around variety, velocity, and volume for that data to make those better insights
available to retail users.
Listen to the podcast. Find it on iTunes. Get the mobile app. Sponsor: Hewlett
Packard Enterprise.
Dana Gardner: Hello, and welcome to the next edition of the HPE Discover Podcast Series.
I'm Dana Gardner, Principal Analyst at Interarbor Solutions, your host and moderator for this
ongoing discussion on IT innovation and how it’s making an impact on people’s lives.
Our next big-data use case leadership discussion explores how retail luxury goods
market analysis provider Sky I.T. Group has upped its game to provide more buyer
behavior analysis faster and with more depth. We will see how Sky I.T. changed its
data analysis platform infrastructure and why that has helped solve its challenges
around data variety, velocity, and volume to make better insights available to its
retail users.
Here to share how retail intelligence just got a whole lot smarter, we are joined by
Jay Hakami. He is the President of Sky I.T. Group in New York. Welcome, Jay.
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Jay Hakami: Thank you very much. Thank you for having us.
Gardner: We're also here with Dane Adcock, Vice President of Business
Development at Sky I.T. Group. Welcome Dane.
Dane Adcock: Thank you very much.
Gardner: And we're also here with Stephen Czetty. He is Vice President and Chief Technology
Officer at Sky I.T. Group. Welcome to BriefingsDirect, Stephen.
Stephen Czetty: Thank you, Dana, and I'm looking forward to the chance.
Gardner: It’s a really hot topic these days. Dane, let me start with you. What are the top trends
that are driving the need for greater and better big-data analysis for retailers? Why do they need
to know more, better, faster?
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Gardner

2. Adcock: Well, customers have more choices. As a result, businesses need to be more agile and
responsive and fill the customer's needs more completely or lose the business. That's driving the
entire industry into practices that mean shorter times from design to shelf in order to be more
responsive.
It has created a great deal of gross marketing pressure, because there's simply more competition
and more selections that a consumer can make with their dollar today.
Gardner: Is there anything specific to the retail process around luxury goods that is even more
pressing when it comes to this additional speed? Are there more choices and higher expectations
of the end user?
Greater penalty
Adcock: Yes. The downside to making mistakes in terms of designing a product and allocating
it in the right amounts to locations at the store level carries a much greater penalty, because it has
to be liquidated. There's not a chance to simply cut back on the supply chain side, and so margins
are more at risk in terms of making the mistake.
Ten years ago, from a fashion perspective, it was about optimizing the return and focusing on
winners. Today, you also have to plan to manage and optimize the margins on your losers as
well. So, it's a total package.
Gardner: So, clearly, the more you know about what those users are doing or what they have
done is going to be essential. It seems to me, though, that we'rere talking about a market-wide
look rather than just one store, one retailer, or one brand.
How does that work, Jay? How do we get to the point where we've been able to gather
information at a fairly comprehensive level, rather than cherry-picking or maybe getting a non-
representative look based on only one organization’s view into the market?
Hakami: With SKYPAD, what we're doing is collecting data from the supplier,
from the wholesaler, as well as from their retail stores, their wholesale business,
and their dot-com, meaning the whole omni channel. When we collect that data,
we cleanse it to make sure its meaningful to the user.
Now, we're dealing with a connected world where the retailer, wholesalers, and
suppliers have to talk to one another and plan together for the buying season. So
the partnerships and the insight that they get into the product performance is
extremely important, as Dane mentioned, in terms of the gross margin and in terms of the
software information. SKYPAD basically provides that intelligence, that insight, into this retail/
wholesale world.
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Hakami

3. Gardner: Correct me if I'm wrong, but isn’t this also a case where people are opening up their
information and making it available for the benefit of a community or recognizing that the more
data and the more analysis that’s available, the better it is for all the participants, even if there's
an element of competition at some point?
Hakami: Dana, that's correct. The retail business likes to share the information with their
suppliers, but they're not sharing it across all the suppliers. They're sharing it with each
individual supplier. Then, you have the market research companies who come in and give you
aggregation of trends and so on. But the retailers are interested in sell-through. They're interested
in telling X supplier, "This is how your products are performing in my stores."
If they're not performing, then there's going to be a mark down. There's going to be less of a
margin for you and for us. So, there's a very strong interest between the retailer and a specific
supplier to improve the performance of the product and the sell-through of those products on the
floor.
Gardner: Before we learn more about the data science and dealing with the technology and
business case issues, tell us a little bit more about Sky I.T. Group, how you came about, and what
you're doing with SKYPAD to solve some of these issues across this entire supply chain and
retail market spot.
Complex history
Hakami: I'll take the beginning. I'll give you a little bit of the history, Dana, and then maybe
Dane and Stephen can jump in and tell you what we are doing today, which is extremely
complex and interesting at the same time.
We started with SKYPAD about eight years ago. We found a pain point within our customers
where they were dealing with so many retailers, as well as their own retail stores, and not getting
the information that they needed to make sound business decisions on a timely basis.
We started with one customer, which was Theory. We came to them and we said, "We can give
you a solution where we're going to take some data from your retailers, from your retail stores,
from your dot-com, and bring it all into one dashboard, so you can actually see what’s selling
and what’s not selling."
Fast forward, we've been able to take not only EDI transactions, but also retail portals. We're
taking information from any format you can imagine -- from Excel, PDF, merchant spreadsheets
-- bringing that wealth of data into our data warehouse, cleansing it, and then populating the
dashboard.
So today, SKYPAD is giving a wealth of information to the users by the sheer fact that they don’t
have to go out by retailer and get the information. That’s what we do, and we give them, on a
Monday morning, the information they need to make decisions.
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4. Dane, can you elaborate more on this as well?
Adcock: This process has evolved from a time when EDI was easy, because it was structured,
but it was also limited in the number of metrics that were provided by the mainstream. As these
business intelligence (BI) tools have become more popular, the distribution of data coming from
the retailers has gotten more ubiquitous and broader in terms of the metrics.
But the challenge has moved from reporting to identification of all these data sources and
communication methodologies and different formats. These can change from week to week,
because they're being launched by individuals, rather than systems, in terms of Excel
spreadsheets and PDF files. Sometimes, they come from multiple sources from the same retailer.
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One of our accounts would like to see all of their data together, so they can see trends across
categories and different geographies and markets. The challenge is to bring all those data sources
together and align them to their own item master file, rather than the retailer’s item master file,
and then be able to understand trends, which accounts are generating the most profits, and what
strategies are the most profitable.
It's been a shifting model from the challenge of reporting all this data together, to data collection.
And there's a lot more of it today, because more retailers report at the UPC level, size level, and
the store level. They're broadcasting some of this data by day. The data pours in, and the quicker
they can make a decision, the more money they can make. So, there's a lot of pressure to turn it
around.
Gardner: Let me understand, Dane. When you're putting out those reports on Monday morning,
do you get queries back? Is this a sort of a conversation, if you will, where not only are you
presenting your findings, but people have specific questions about specific things? Do you allow
for them to do that, and is the data therefore something that’s subject to query?
Subject to queries
Adcock: It’s subject to queries in the sense that they're able to do their own discovery within
the data. In other words, we put it in a BI tool, it’s on the web, and they're doing their own
analysis. They're probing to see what their best styles are. They're trying to understand how
colors are moving, and they're looking to see where they're low on stock, where they may be able
to backfill in the marketplace, and trying to understand what attributes are really driving sales.
Page 4

5. But of course, they always have questions about completeness of the data. When things don’t
look correct, they have questions about it. That drives us to be able to do analysis on the fly, on-
demand, and deliver some responses, "All your stores are there, all of your locations, everything
looks normal." Or perhaps there seems to be some flaws or things in the data that don’t actually
look correct.
Not only do we need to organize it and provide it to them so that they can do their own broad,
flexible analysis, but they're coming back to us with questions about how their data was audited.
And they're looking for us to do the analysis on the spot and provide them with satisfactory
answers.
Gardner: Stephen Czetty, we've heard about the use case, the business case, and
how this data challenge has grown in terms of variety as well as volume. What do
you need to bring to the table from the architecture and the data platform to
sustain this growth and provide for the agility that these market decision makers
are demanding?
Czetty: We started out with an abacus, in a sense, but today we collect information from
thousands of sources literally every single week. Close to 9,000 files will come across to us and
we'll process them correctly and sort of them out -- what client they belong to and so forth, but
the challenge is forever growing.
We needed to go from older technology to newer technology, because our volumes of data are
increasing and the amount of time that we need to consume to data in is static.
So we're quite aware that we have a time limit. We found Vertica as a platform for us to be able
to collect the data into a coherent structure in a very rapid time as opposed to our legacy systems.
It allows us to treat the data in a truly vertical way, although that has nothing to do with the
application or the database itself. In the past we had to deal with each client separately. Now we
can deal with each retailer separately and just collect their data for every single client that we
have. That makes our processes much more pipelined and far faster in performance.
The secret sauce behind that is the ability in our Vertica environment to rapidly sort out the data
-- where it belongs, who it belongs to -- calculate it out correctly, put it into the database tables
that we need to, and then serve it back to the front end that we're using to represent it.
That's why we've shifted from a traditional database model to a Vertica-type model. It's 100
percent SQL for us, so it looks the same for everybody who is querying it, but under the covers
we get tremendous performance and compression and lots of cost savings.
Gardner: For some organizations that are dealing with the different sources and different types
of data, cleansing is one problem. Then, the ability to warehouse that and make it available for
queries is a separate problem. You've been able to tackle those both at the same time with the
same platform. Is that right?
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Czetty

6. Proprietary parsers
Czetty: That's correct. We get the data, and we have proprietary parsers for every single data
type that we get. There are a couple of hundred of them at this point. But all of that data, after
parsing, goes into Vertica. From there, we can very rapidly figure out what is going where and
what is not going anywhere, because it’s incomplete or it’s not ours, which happens, or it’s not
relevant to our processes, which happens.
We can sort out what we've collected very rapidly and then integrate it with the information we
already have or insert new information if it's brand-new. Prior to this, we'd been doing this by
hand to a large-scale, and that's not effective any longer with our number of clients growing.
Gardner: I'd like to hear more about what your actual deployment is, but before we do that, let’s
go back to the business case. Dane and Jay, when Vertica came online, when Steve was able to
give you some of these more pronounced capabilities, how did that translate into a benefit for
your business? How did you bring that out to the market, and what's been the response?
Hakami: I think the first response was "wow." And I think the second response was "Wow, how
can we do this fast and move quickly to this platform?"
Let me give you some examples. When Steve did the proof of concept (POC) with the folks from
HP, we were very impressed with the statistics we had seen. In other words, going from a
processing time of eight or nine hours to minutes was a huge advantage that we saw from the
business side, showing our customers that we can load data much faster.
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The ability to use less hardware and infrastructure as a result of the architecture of Vertica
allowed us to reduce, and to continue to reduce, the cost of infrastructure. These two are the
major benefits that I've seen in the evolution of us moving from our legacy to Vertica.
From the business perspective, if we're able to deliver faster and more reliably to the customer,
we accomplished one of the major goals that we set for ourselves with SKYPAD.
Adcock: Let me add something there. Jay is exactly right. The real impact, as it translates into
the business, is that we have to stop processing and stop collecting data at a certain point in the
morning and start processing it in order for us to make our service-level agreements (SLAs) on
reporting for our clients, because they start their analysis. The retail data comes in staggered over
the morning and it may not all be in by the time that we need to shut that processing off.
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7. One of the things that moving to Vertica has allowed us to do is to cut that time off later, and
when we cut it off later, we have more data, as a rule, for a customer earlier in the morning to do
their analysis. They don’t have to wait until the afternoon. That’s a big benefit. They get a much
better view of their business.
Driving more metrics
The other thing that it has enabled us to do is drive more metrics into the database and do some
processing in the database, rather than in the user tool, which makes the user tool faster and it
provides more value.
For example, maybe for age on the floor, we can do the calculation in the background, in the
database, and it doesn't impede the response in the front-end engine. We get more metrics in the
database calculated rather than in our user tool, and it becomes more flexible and more valuable.
Gardner: So not only are you doing what you used to do faster, better, cheaper, but you're able
to now do things you couldn't have done before in terms of your quality of data and analysis. Is
there anything else that is of a business nature that you're able to do vis-à-vis analytics that just
wasn't possible before, and might, in fact, be equivalent of a new product line or a new service
for you?
Czetty: In the old model, when we got a new client we had to essentially recreate the processes
that we'd built for other clients to match that new client, because they're collecting that data just
for that client just at that moment.
So 99 percent of it is the same as any other client, but one percent is always different, and it had
to be built out. On-boarding a client, as we call it, took us a considerable amount of time -- we
are talking weeks.
In the current model, where we're centered on retailers, the only thing that will take us a long
time to do in this particular situation is if there's a new retailer that we've never collected data
from. We have to understand their methodology of delivery, how it comes, how complex it is and
so forth, and then create the logic to load that into the database correctly to match up with what
we are collecting for others.
In this scenario, since we’ve got so many clients, very few new stores or new retailers show up,
and typically it’s just our clients on retail chain, and therefore our on-boarding is just simplified,
because if we are getting Nordstrom’s data from client A, we're getting the same exact data for
client B, C, D, E, and F.
Now, it comes through a single funnel and it's the Nordstrom funnel. It’s just a lot easier to deal
with, and on-boarding comes naturally.
Page 7

8. Hakami: In addition to that, since we're adding more significant clients, the ability to increase
variety, velocity, and volume is very important to us. We couldn't scale without having Vertica as
a foundation for us. We'd be standing still, rather than moving forward and being innovative, if
we stayed where we were. So this is a monumental change and a very instrumental change for us
going forward.
Gardner: Steve, tell us a little bit about your actual deployment. Is this a single tenant
environment? Are you on a single database? What’s your server or data center environment?
What's been the impact of that on your storage and compression and costs associated with some
of the ancillary issues?
Multi-tenant environment
Czetty: To begin with, we're coming from a multi-tenant environment. Every client had its
own private database in the past, because in DB2, we couldn't add all these clients into one
database and get the job done. There was not enough horsepower to do the queries and the loads.
We ran a number of databases on a farm of servers, on Rackspace as our hosting system. When
we brought in Vertica, we put up a minimal configuration with three nodes, and we're still living
with that minimal configuration with three nodes.
We haven't exhausted our capacity on the license by any means whatsoever in loading up this
data. The compression is obscenely high for us, because at the end of the day, our data absolutely
lends itself to being compressed.
Everything repeats over and over again every single week. In the world of Vertica, that means it
only appears once in wherever it lives in the database, and the rest of it is magic. Not to get into
the technology underneath it at this point, from our perspective, it's just very effective in that
scenario.
Also in our DB2 world, we're using quite costly large SAN configurations with lots of spindles,
so that we can have the data distributed all across the spindles for performance on DB2, and that
does improve the performance of that product.
However, in Vertica, we have 600 GB drives and we can just pop more in if we need to expand
our capacity. With the three nodes, we've had zero problems with performance. It hasn't been an
issue at all. We're just looking back and saying that we wish we had this a little sooner.
Vertica came in and did the install for us initially. Then, we ended up taking those servers down
and reinstalling it ourselves. With a little information from the guide, we were able to do it. We
wanted to learn it for ourselves. That took us probably a day and a half to two days, as opposed
Page 8

9. to Vertica doing it in two hours. But other than that, everything is just fine. We’ve had a little
training, we’ve gone to the Vertica event to learn how other people are dealing with things, and
it's been quite a bit of fun.
Now there is a lot of work we have to do at the back end to transform our processes to this new
methodology. There are some restrictions on how we can do things, updates and so forth. So, we
had to reengineer that into this new technology, but other than that, no changes. The biggest
change is that we went vertical on the retail silos. That's just a big win for us.
Gardner: As you know, Vertica is cloud ready. Is there any benefit to that further down the road
where maybe it’s around issues of a spike demand in holiday season, for example, or for backup
recovery or business continuity? Any thoughts about where you might leverage that cloud
readiness in the future?
Dedicated servers
Czetty: We're already sort of in the cloud with the use of dedicated servers, but in our business,
the volume increases in the stores around holidays is not doubling the volume. It’s adding 10
percent, 15 percent, maybe 20 percent of the volume for the holiday season. It hasn’t been that
big a problem in DB2. So, it’s certainly not going to be a problem in Vertica.
We've looked at virtualization in the cloud, but with the size of the hardware that we actually
want to run, we want to take advantage of the speed and the memory and everything else. We put
up pretty robust servers ourselves, and it turns out that in secure cloud environments like we're
using right now at Rackspace, it's simply less expensive to do it as dedicated equipment. To spin
up a machine, like another node for us at Rackspace, would take about same time it would take
for virtual system setup and configure to a day or so. They can give us another node just like this
on our rack.
We looked at the cloud financially every single time that somebody came around and said there
was a better cloud deal, but so far, owning it seems to be a better financial approach.
Gardner: Before we close out, looking to the future, I suppose the retailers are only going to
face more competition. They're going to be getting more demand from their end users or
customers for user experience for information.
We're going to see more mobile devices that will be used in a dot-com world or even a retail
world. We are going to start to see geolocation data brought to bear. We're going to expect the
Internet of Things (IoT) to kick in at some point where there might be more sensors involved
either in a retail environment or across the supply chain.
Clearly, there's going to be more demand for more data doing more things faster. Do you feel like
you're in a good position to do that? Where do you see your next challenges from the data-
architecture perspective?
Page 9

10. Czetty: Not to disparage too much the industry of luxury, but at this point, they're not the
bleeding edge on the data collection and analysis side, where they are on the bleeding edge on
social media and so forth. We've anticipated that. We've got some clients who were collecting
information about their web activities and we have done analysis for identifying customers who
are presenting different personas through their different methods as they contact the company.
We're dabbling in that area and that’s going to grow as it becomes so tablet-oriented or phone-
oriented as the interfaces go. A lot of sales are potentially going to go through social media and
not just the official websites in the future.
We'll be capturing that information as well. We’ve got some experience with that kind of data
that we’ve done in the past. So, this is something I'm looking forward to getting more of, but as
of today, we’re only doing it for a few clients.
Well positioned
Hakami: In terms of planning, we're very well-positioned as a hub between the wholesaler and
the retailer, the wholesaler and their own retail stores, as well as the wholesaler and their dot-
coms. One of the things that we are looking into, and this is going to probably get more oxygen
next year, is also taking a look at the relationships and the data between the retailer and the
consumer.
As you mentioned, this is a growing area, and the retailers are looking to capture more of the
consumer information so they can target-market to them, not based on segment but based on
individual preferences. This is again a huge amount of data that needs to be cleansed, populated,
and then presented to the CMOs of companies to be able to sell more, market more, and be in
front of their customers much more than ever before.
Gardner: That’s a big trend that we are seeing in many different sectors of the economy -- that
drive for personalization, and it really is a result of these data technologies to allow that to
happen.
Last word to you, Dane. Any other thoughts about where the intersection of computer science
capabilities and market intelligence demands are coming together in new and interesting ways?
Adcock: I'm excited about the whole approach to leveraging some predictive capabilities
alongside the great inventory of data that we've put together for our clients. It's not just about
creating better forecasts of demand, but optimizing different metrics, using this data to
understand when product should be marked down, what types of attributes of products seem to
be favored by different locations of stores that are obviously alike in terms of their shopper
profiles, and bringing together better allocations and quantities in breadth and depth of products
to individual locations to drive better, higher percentage of full-price selling and fewer
markdowns for our clients.
Page 10

11. So it’s a predictive side, rather than discovery using a BI tool.
Czetty: Just to add to that, there's the margin. When we talked to CEOs and CFOs five or six
years ago and told them we could improve business by two, three, or four percent, they were
laughing at us, saying it was meaningless to them. Now, three, four, or five percent, even in the
luxury market, is a huge improvement to business. The companies like Michael Kors, Tory
Burch, Marc Jacobs, Giorgio Armani, and Prada are all looking for those margins.
So, how do we become more efficient with a product assortment, how do we become more
efficient with distribution and all of these products to different sales channels, and then how do
we increase our margins? How do we not over-manufacture and not create those blue shirts in
Florida, where they are not selling, and create them for Detroit, where they're selling like
hotcakes.
These are the things that customers are looking at and they must have that tool or tools in place
to be able to manage their merchandising and by doing so become a lot more agile and a lot more
profitable.
Gardner: Well, great. I'm afraid we will have to leave it there. We've been discussing how retail
luxury goods and fashion market goods providers are using analysis from Sky I.T. Group and
how Sky I.T. Group heads up its game through using HPE Vertica to provide more buyer
behavior analysis faster, better, and cheaper.
And we’ve seen how Sky I.T. has changed its platform and solved the challenges around variety,
velocity, and volume for that data to make those better insights available to those retail users,
allowing them to become more data-driven across their entire market.
So please join me in thanking our guests. We have been talking with Jay Hakami, President of
Sky I.T. Group in New York. Thank you so much, Jay.
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Hakami: Thank you, Dana. I appreciate it very much.
Gardner: And we've also been talking with Dane Adcock, Vice President of Business
Development at Sky I.T. Group. Thank you, Dane.
Adcock: It’s great to have the conversation. Thank you.
Gardner: I've enjoyed it myself. And lastly, a big thank you to Stephen Czetty, Vice-President
and Chief Technology Officer there at Sky I.T. Group. Thank you, Stephen.
Page 11

12. Czetty: You're very welcome, and I enjoyed the conversation. Thank you.
Gardner: And I’d also like to thank our audience as well for joining us for this big-data use case
leadership discussion.
I'm Dana Gardner, Principal Analyst at Interarbor Solutions, your host for this ongoing series of
Hewlett Packard Enterprise-sponsored discussions. Thanks again for listening, and come back
next time.
Listen to the podcast. Find it on iTunes. Get the mobile app. Sponsor: Hewlett
Packard Enterprise.
Transcript of a sponsored discussion on how Sky I.T. has changed its platform and solved the
challenges around variety, velocity, and volume for that data to make those better insights
available to retail users. Copyright Interarbor Solutions, LLC, 2005-2016. All rights reserved.
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