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IBM is not Enough: i2 Snatches Aspect and SupplyBase

Written By: D. Geller
Published On: April 12 2000

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Event Summary

Hardly stopping to take stock after celebrating its momentous partnership with IBM (NYSE: IBM) and Ariba (NASDAQ: ARBA), i2 Technologies (NASDAQ: ITWO) announced it will acquire Aspect Development (NASDAQ: ASDV) for what is billed as the largest merger in software history. While the price tag of $8.6 billion (based on the closing price on March 13) is as much a reflection of the extremely high market capitalization of Internet stocks, the deal is large by any measure.

The TradeMatrix product offered by i2 supports an intelligent - i.e., driven by data and analysis - supply chain solution for B2B marketplaces. Aspect specializes in design collaboration, direct materials procurement and the management of mission-critical parts and suppliers. Aspect also maintains an online catalog of 17 million standard parts and supplies. SupplyBase is a web site that supports manufacturing with solutions for web-based product design and sourcing of custom parts and assemblies.

Market Impact

If not cradle to grave, this merger can certainly be called paper to post-sales. The combined company will offer a solution that will come into play in almost every stage of a B2B manufacturer's operations. Designers can work together both sharing designs and searching for the parts and specifications they need. They can then pass the completed designs to manufacturing where purchasing will take place through a large electronic marketplace and delivery information will be available both to the manufacturer and to its downstream customers. Only the pencils the designers use for scratching the designs on napkins at lunchtime and the champagne they need to celebrate product delivery may not be covered, and those will be available to i2 customers through the Ariba Network.

Although i2 plans to expand its own sales force and channel the integrated product of the new company, this integrated product will also almost surely be included in the arrangement with IBM, which has IBM's own sales force selling the Ariba/i2/IBM solution and its Global Services division supporting it with consulting and hosting.

User Recommendations

The current customers of the combined company represent 400 of the world's largest manufacturers, and companies of this magnitude are the ones with the most interest in the announcement. However, we expect that an ASP solution for the next tier of companies will be announced before the end of the year.

 

 
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