Analysis of Manhattan Associates' New Partnership with CommercialWare

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Analysis of Manhattan Associates' New Partnership with CommercialWare
S. McVey - January 23rd, 2000

Event Summary

Supply chain execution vendor, Manhattan Associates recently took a big step toward e-Business by partnering with CommercialWare, a 50 million transaction developer of e-Commerce enabling solutions. Mozart, CommercialWare's flagship offering, integrates customer order information across multiple channels, including web, phone, fax, mail and kiosk. The alliance aims to integrate Manhattan's back-end fulfillment capabilities with CommercialWare's Internet-based order management technology.

Market Impact

Initially, many startups and established companies fail to anticipate the challenges of electronic customer fulfillment when erecting Internet storefronts. In order for these challenges to be overcome, e-Commerce companies need to rethink and upgrade their infrastructure to accommodate transactions that take place at Internet speed (See TEC Technology Research Note: "Advanced Planning and Scheduling: A Critical Part of E-Fulfillment" December 10th, 1999). With increasing frequency, these companies are turning to software vendors of e-fulfillment solutions, a community that includes Manhattan Associates. The recent partnership is a good move for Atlanta-based Manhattan, which has lagged behind other SCM vendors in marketing itself as an e-fulfillment enabler. Industri-Matematik launched VIVALDI, its e-commerce fulfillment and customer service suite in May 1999. Other SCM vendors who have made inroads into e-business include EXE Technologies, Logility,. and most recently Essentus (formerly Richter Systems). Manhattan's experience in e-fulfillment actually dates back to the mid-90s and includes solutions for Patagonia, International Cornerstone Group, and J. Jill. In terms of financial viability, new alliances that further its role as an e-fulfillment software provider provides Manhattan a means for reversing a decline in licenses over the past two years (see Figure 1). Although growth in maintenance revenues indicates Manhattan is staying close to its existing customers, long term viability as a software company depends on revenues from new clients.

User Recommendations

The enthusiasm of corporate press announcements often obscures the actual market readiness of the highlighted initiative, alliance, or product. While Manhattan has taken a promising step toward raising its visibility in Internet fulfillment, the alliance with CommercialWare is new and both parties will need to make significant investments of time and money to marry the traditionally brick-and-mortar capabilities of Manhattan with CommercialWare's electronic customer order management applications.

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