Written by 2:43 am New technologies, Supply chain excellence, Uncategorized • 8 Comments

Where have all the Flowers Gone?

Where have all the flowers gone? Long time passing
Where have all the flowers gone? Long time ago

On January 28, 2010, JDA completed the acquisition of i2 Technologies for $604 Million in cash and stock. It was 2.5 times revenue.  Fourteen years earlier, in 1996, Red Pepper sold for $225 Million or 24 times revenue.  In my opinion, these were the low and high water marks for the industry.  i2 Technologies, once the source for innovation, sold for 1/10th the multiple of Red Prairie the early industry darling.

Over a cup of coffee on a beach in the Caribbean, I quickly jotted down the names of over fifty supply chain management companies that have come and gone between these two watermarks. Want to go down memory lane with me? Think back to the names that used to dot the headlines. Names like Avyx, Aspect Development, Blue Agave, Click Commerce, Demantra, Demand Solutions, E3, Evant, GLOG, ILOG, Intentia, Logistics.com, Logictools, Manugistics, Marcam, Mercia, Nistevo, Numetrix, PartMiner, Prescient, ProMira, Red Pepper, Retek, Rightworks, SSA Global, Spaceworks, Synquest, SupplyWorks, STG Holdings, SYNCRA, Talus, Thinque Systems, Thruput, Western Digital, V3, Vigilance are now reserved for the pages of history. Where did they go? 40% were rolled-up into ERP portfolios and the rest were swallowed up by the then leaders of SCM.

Market consolidation happens in every industry.  In the first half of the twentieth century, there were two thousand automotive companies; and in the period of 1991-1939, there were two hundred airplane manufacturers. Today, in either industry, you can now count them on one hand. There is a cycle.  Innovation is followed by consolidation. And, so it is in SCM technology market. 

Who would have ever predicted that the arch enemies of i2 Technologies and Manugistics would consolidate in a roll-up of JDA? Or that i2 Technologies, the industry darling, would sell for 2.4X earnings.

Were have all the flowers gone? They are long time passing. Market consolidation is seldom good  news for software users. As I throw my wadded napkin (with all of the past supply chain technology names scribbled across it) into the trash, I think that it is time for a new era in supply chain management.  What do you think?