A couple of days ago, JDA closed its acquisition of i2, completing a supply chain vendor roll-up of two of the most valuable technology assets in the planning business: i2 and Manugistics. Back in the crazy B2B marketplace/exchange era, no one would have thought this possible: JDA, an enterprise software company that had a particular strength in retail at the time, was barely on the broader supply chain map, especially in relation to i2, who many viewed as the gorilla of the market. Now, JDA owns two of the most valuable assets in the market. Now, I don't follow this market like I used to, but back when I was at FreeMarkets, I was part of the crazy team that dreamed up the acquisition of Adexa, which at the time was a next-generation competitor to i2. (In retrospect, this deal, had it closed, would not have been the best move, but hey; it was a different time, one where such a thought was not as boneheaded as Ariba buying SupplierMarket or trying to buy Agile, or i2 spending billions on Aspect development.)
Flash forward a few years: nearly everything about the supply chain market has changed. Buyers are smarter -- and less willing to take chances with unproven planning systems (look at Nike). SAP and Oracle have caught up to some degree in core areas, but not in service parts, multi-echelon planning, and other narrowly focused areas. So where does this leave JDA (and its soon-to-be-digested i2 morsel)? Some of the best commentary on the deal I've seen comes courtesy of Supply Chain Matters. Guy Courtin, who used to work at i2, recently penned a guest column for Bob Ferrari in which he shares his thoughts on the transaction and what it means for suppy chain.
According to Guy, "[along] with Manugistics, i2 Technologies created and defined a revolutionary supply chain market in the 1990s. By leveraging advanced technology coupled with the speed and visibility of the web, both companies demonstrated how package applications could be leveraged to allow companies to plan, optimize and execute their supply chain to maximize their returns." Flash forward; now, "we will be saying hello to a new dawn for the supply chain space. A larger JDA … will offer the market an interesting alternative to challenge Oracle and SAP for supply chain business. The questions remain: how rapidly can JDA integrate i2's industry expertise, what will happen with the i2 client base and how quickly can the JDA prospects and install base take advantage of the i2 innovation?"
Guy hints that JDA customers and prospects should rejoice in the solution possibilities from the deal. For them, "this move should be an exciting opportunity" as they "will now have access to a number of solutions and innovations that can greatly enhance its businesses." But "how JDA packages and prices these new solutions will determine how quickly its install base can start leveraging these new tools." I agree with Guy that the supply chain era is over, but it remains to be seen whether further consolidation plays happen. For example, Marlin Equity, which also owns Emptoris, has two of the top legacy assets in service parts management, Xelus and Servigistics. Might these (along with MCA Solutions and others) be a better fit as part of JDA, let alone SAP or Oracle? I suppose that if acquisition activities continue to heat up in 2010, we could very well find out.