More Marketplace Success For Manugistics?

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More Marketplace Success For Manugistics?
S. McVey - August 24, 2000

Event Summary

Manugistics was recently named as a contender in's selection for a best-of-breed Supply Chain Management package to power its Internet marketplace, an online community where players in the aerospace, aviation, and defense industries can buy and sell new and used airplane parts. Its eMarketplace offers members access to parts inventories of 2,300 suppliers constituting over 28 million line items, auctions for unloading excess parts, aircraft sales, and job searching among other services. Powering the site are best-of-breed software and content providers, of which Manugistics NetWORKS may be the latest.

In June, PartsBase chose to deliver software to support international shipping activities, such as trade compliance support and customs brokerage, for its 18,000 members in over 125 countries. More recently, PartsBase announced it would use Mercata's We-Commerce Network as the platform for its hosted group buying services, which it hopes will give buyers volume discounts and make sellers more eager to sign up to capitalize on the potential for increased sales and market share.

Market Impact

Give Manugistics high marks in self-confidence: some vendors are reluctant to announce new client wins before successful completion of the implementation, let alone before the deal is final. It is perhaps due to this confidence that the "new" Manugistics continues to attract users to its supply chain planning technology, NetWORKS. Few predicted that the veteran SCM vendor would have been able to turn its business around after a turbulent 1999, in which it suffered a 14% decline in revenue, record losses totaling $96 million, and wholesale changes to its executive management team.

In its last reported quarter ended May 31, 2000, Manugistics demonstrated that it could still compete effectively for clients in the online trading exchanges market, announcing the largest license revenue since it ran neck-and neck with i2 Technologies. Though i2 has moved on to become a force in e-commerce, both alone and in partnership with Ariba, IBM and others, Manugistics clearly remains a contender, especially with wins at established e-commerce companies like

Of course, it may be that Manugistics simply wants to associate its name as often as possible with electronic marketplaces. Regardless of whether it wins the contract or not, the fact that it was in the running goes some way toward keeping it current in the minds of the buying public.

User Recommendations

When considering which of the myriad online marketplaces to join, companies should thoroughly investigate the neutrality of participants in the exchange. Neutrality is essential for the success of online marketplaces. Ventures composed of large "anchor" suppliers with equally large equity stakes discourage participation of competing suppliers, a phenomenon that translates into limited selections of goods and higher prices for buyers. aspires to deliver neutrality and bills itself as a true "butterfly" exchange, in which multiple suppliers compete on an equal footing for the attention of multiple buyers, with no one supplier having the advantage. PartsBase's best-of-breed software strategy should also be a strong selling point for prospective participants, since it demonstrates that the company is wise enough to recognize that no one vendor can support the entirety of tasks that Internet marketplaces are expected to provide.

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