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JDA Software Aims to Be Supply Chain Leader
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| Written by Mel Duvall |
After 20 years of battling it out to be an independent software vendor, i2 Technologies surrendered this week, agreeing to be acquired by JDA Software.
JDA of Scottsdale, Ariz., will purchase Dallas-based i2 for about $346 million in cash.
The deal brings together two of the leading contenders in the supply chain software arena, and according to the companies, should result in at least $20 million in savings a year.
JDA’s name may not initially register with a lot of people as being a supply chain software company. That’s primarily because up until 2006 it was best known as a provider of applications for the retail sector – everything from retail store management, to merchandise and inventory management, space planning at the store shelf level, and business optimization. But in April of 2006 it made a big push into general supply chain software when it purchased Manugistics of Rockville, Md. for $211 million in cash.
Prior to JDA’s purchase, Manugistics and i2 had battled head-to-head in the supply chain arena. Both became market darlings during the dot com era, then fell equally hard with the dot com crash.
In a conference call to announce the i2 acquisition, JDA chief executive Hamish Brewer says that while both companies offer supply chain software, i2 had a customer base that was largely untapped by JDA. i2’s customers included such blue chip names as Toyota, General Motors, Nokia and Anheuser-Busch. He also believes the companies together will be better able to compete against the likes of SAP and Oracle.
“Even though i2 has been through some challenging times . . . we looked into the company and feel the turnaround is well underway,” he said. “We also feel i2 is going to benefit from its association with JDA.”
For its part, i2 seemed resigned to the fact that it could not compete on its own. “In an industry that continues to consolidate, scale matters,” i2 CEO Pallab Chatterjee commented. “In that regard, the combination of these two companies will create one of the world’s strongest, best-of-breed solution providers focused on the global supply chain.”
There had been some speculation that SAP or Oracle might step in to buy i2, primarily for its customer base, but it’s good to see a strong contender will emerge to continue to offer competition – and innovation - in the space.
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