Supply-Chain App Vendors Consolidate

FRAMINGHAM (03/17/2000) - With two acquisitions announced last week, i2 Technologies Inc. is moving to piece together a unified set of supply-chain planning and purchasing applications for big manufacturers.

But analysts said the Dallas-based company needs to show that it can get its software to work with the products it is bringing into the fold through the purchases of Aspect Development Inc. in Mountain View, California, and Supplybase Inc. in San Francisco.

The wheeling and dealing "gives i2 the biggest supply-chain footprint that anyone has," said Pierre Mitchell, an analyst at AMR Research Inc. in Boston.

For manufacturers, Mitchell said, Aspect and Supplybase sell component-sourcing and purchasing management applications that can complement i2's production and distribution-planning tools.

For now, however, the different products amount to "a grab bag of applications," he added. "They have to get this stuff integrated if they're going to provide a single procurement system to a [user]."

After making its mark as a planning applications vendor, i2 is now "close to delivering a complete supply-chain solution" that also encompasses business-to-business trading exchanges, said Karen Peterson, an analyst at Stamford, Connecticut-based Gartner Group Inc.

But a lot of work needs to be done to make that a reality, Peterson added.

And there's more to be accomplished than integrating the Aspect and Supplybase purchases. For example, under a three-way deal announced earlier this month, i2 plans to link its supply-chain tools to IBM's WebSphere e-commerce software and to online procurement applications developed by Ariba Inc. in Mountain View, California.

Sanjiv Sidhu, i2's CEO, said during a teleconference that his company has been working on integration with both Aspect and Supplybase under joint development deals that were announced in the fall.

Aspect makes software and online catalogs for buying off-the-shelf manufacturing components, while Supplybase focuses on custom-made parts. The all-stock deals are valued at about $7.6 billion for Aspect and $300 million for Supplybase.

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