Adexa Reports Record First Quarter Results

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Adexa Reports Record First Quarter Results
S. McVey - June 9, 2000

Event Summary

Adexa, the vendor formerly known as Paragon Management Systems, announced record revenue for its first quarter of 2000. At $9.5 million, total revenue rose 24% over the fourth quarter of last year and nearly tripled revenue of the first quarter of 1999 of $3.5 million.

The Los Angeles based vendor experienced a rise in each one of its segments: licenses, services, and maintenance. This fact it attributes to increasing popularity in the marketplace for its collaborative planning solutions. Commenting on the quarter's results, CEO Dr. K. Cyrus Hadavi stated, "Our growth is being fueled by companies that recognize our ability to deliver on the promise of e-business."

In response to this growth, Adexa added 39 new employees to its sales and marketing staff, which the company hopes can increase visibility of its iCollaboration suite among corporate buyers. Major wins for iCollaboration in the quarter include Conexant Systems, Inc. and General Motors. It also signed alliances with several third party software providers including Commerce One, Vitria, Essentus, and McHugh Software, plus systems integration firms Compaq Professional Services and Origin. The next few quarters are a time of trial for Adexa as it attempts to shed the anonymity that dogged its existence as Paragon.

Market Impact

Founded in 1994, Adexa seems to have been biding its time for the last six years while the hype focused on bigger supply chain management software players like i2 and Manugistics. This obscurity was largely undeserved as Adexa offers a broad product suite with many advanced features that has found wide acceptance in the semiconductor and high tech electronics industries. For those parts of enterprise management it does not cover, Adexa partners with a host of third party software vendors to further extend its applications into electronic procurement, order management, warehouse management, transportation management, and data warehousing.

Adexa has chosen the right time to advance its image in the marketplace. Among the big competitors in the supply chain management space, i2 is probably the most like Adexa in terms of product offering, industry focus, and to some extent, technology. If Adexa can market itself effectively, it can position itself as an alternative to i2 and take advantage of the void left as i2 grows into new market areas, such as e-commerce. Though i2 will undoubtedly continue to sell its traditional offerings minus B2B and B2C components, its recent moves, such as the acquisition of Aspect Development, have produced some confusion among IT buyers, which nimbler, perhaps hungrier companies like Adexa can exploit to their advantage.

User Recommendations

Users in semiconductor and electronics should place Adexa high on any short list and should not be daunted by its relatively short operating history and small size. Adexa's applications have proven themselves in difficult environments of both small and large companies. Users should keep in mind that many of Adexa's third party software alliances are in early stages, especially Commerce One, Selectica, and Essentus. Still, movement of its primary competitor i2 into e-commerce imparts new urgency to these new partnerships, which improves their chances for producing tangible results.

Users should approach Adexa's collaborative products with realistic expectations, a difficult proposition amid the B2B hype that prevails in the marketplace. Scripted scenario demonstrations are a must for the collaboration products and these should replicate actual business processes used by clients to plan and coordinate forecasts and replenishments with their customers and suppliers.

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