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IBM and SynQuest Sign AS/400 Pact

Written By: Steve McVey
Published On: November 4 1999

IBM and SynQuest Sign AS/400 Pact
S. McVey- November 4th, 1999

Event Summary

In its latest campaign for the lucrative supply chain management (SCM) marketplace, IBM announced a partnership with SynQuest, Inc. to produce a new version of its SynQuest Manufacturing Manager Software for the AS/400. The software is designed to integrate operational planning and execution across a supply chain. As part of the relationship, IBM and SynQuest are providing an integrated solution that includes SynQuest manufacturing management software pre-loaded on AS/400 servers. IBM Global Services implementation and integration services, and IBM Global Financing, which provides financing options for the entire solution, support the solution. The beta site for the new platform is Chesapeake Packaging, a maker of corrugated cardboard products in Pennsylvania. IBM is co-funding the port and has deployed development resources from Rochester, New York to the project.

Market Impact

SynQuest is the most recent addition to IBM's growing cadre of niche supply chain management partners. A similar deal was signed between IBM and i2 in June 1998 that involved porting of i2's natively Unix Rhythm applications to selected IBM platforms. The collaboration is part of a growing trend among hardware vendors to expand their indirect sales channel by establishing competencies in software market segments such as SCM.

In response to IBM's move, other hardware/OS vendors such as Sun Microsystems are likely to step up initiatives in an effort to halt further advances of AS/400. In fact, Sun recently announced a new global SCM competency center that provides a framework for Sun to engage in marketing programs and invest a larger number of sales resources in the supply chain management technology area.

While SynQuest has not committed publicly to any revenue projections from the program, the small, private vendor is hoping the deal generates significant momentum for its license sales over the next several years. SynQuest's Jamie Muir cites that initially the move will target existing AS/400 customers, but that natural opportunities for expansion will result as the relationship matures. These include both luring Unix/NT customers over to AS/400 and extending other SynQuest products to AS/400. In addition, early success of the program could be a critical factor in resurrecting SynQuest's plan for an IPO next year.

User Recommendations

Although the user community increasingly looks toward Unix and Windows NT, AS/400 remains the most prevalent, multi-user business platform in the world. Its customer base includes 95 percent of Fortune 100 industrial companies. Provided that development and testing continues on schedule, general availability of the new AS/400 version should occur near the end of March 2000. Before jumping into a new contract, however, AS/400 based users should demand a site visit that allows a first hand look at the application in Chesapeake Packaging's live environment. Face-to-face meetings with users, IS personnel, and management are a crucial part of these visits, enabling prospective clients to learn about kinks and foibles of the new platform first hand.

 
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