i2 Third Quarter Results Are The Usual Story

  • Written By: Steve McVey
  • Published: November 3 2000

i2 Third Quarter Results Are The Usual Story
S. McVey - November 3, 2000

Event Summary

There were few surprises in i2 Technologies' reported results for the third quarter ended September 30, 2000. License revenues of $201.6 million grew 34% over last quarter and 128% over the same period last year. Total revenues reached $319.5 million, a 32% increase over last quarter total revenues of $242.6 million and 118% greater than total revenues of $146.3 million for the third quarter of fiscal 1999. Net income excluding amortization of intangibles and non-recurring charges was $28.8 million, representing an increase of 188% in normalized earnings compared to $10.0 million in the third quarter last year.

Success in selling technology for B2B marketplaces continues to fuel i2's record growth. "Last week, we announced three of the largest contracts in i2's history, with one new and two existing customers," said Sanjiv Sidhu, i2 Chairman and CEO. "Kmart joins Siemens and Caterpillar to become one of the first three customers to sign up for i2's New Economy program, designed to help companies aggressively use e-business solutions to transform their businesses to be more customer-focused and competitive in the Internet economy."(See i2 Will Come Out Ahead In Kmart Deal). Other new clients include Cypress Semiconductor Corporation, Allied Worldwide, and Sears.

i2 also announced i2 TradeMatrix 5.0, the latest release of its marketplace platform and solution suite. TradeMatrix 5.0 encompasses solutions, content and a multi-enterprise platform that i2 believes will "take companies beyond the first-generation bid/ask marketplace model prevalent today, to a second-generation model that enables e-marketplaces to model, plan and transact across all participants in a value chain."

Market Impact

i2 has cleverly chosen to side-step direct competition with the big ERP players by labeling its solutions the "second-generation," distancing it from so-called first generation or enterprise-centric solutions. In doing so, it bypasses SAP APO, Oracle APS, JD Edwards xtr@ and other ERP supply chain offerings that can only apply optimization as a point solution within the four walls of an enterprise.

Rival SCM vendors must look on i2 with a mixture of envy and gratitude. As a high profile supply chain company that successfully transitioned into e-commerce and B2B, i2 legitimizes their own marketplace offerings. A notable example is Manugistics Group, which has secured large B2B network optimization deals with Amazon.com and Deere, among others. Though Manugistics would justifiably balk at giving all the credit for its revival to i2, having a superstar from its own SCM ranks in the spotlight certainly does no harm. i2 stops short of assuming credit for the growing interest in supply chain as an alternative to ERP. Instead, it feels that success of other supply chain management vendors reflects the general resurgence in the e-commerce and B2B markets now that Y2K fears are a memory and companies have a better understanding of the direction that Internet business is heading.

User Recommendations

The reach of i2 TradeMatrix into B2B and B2C marketplaces coupled with its success in most of the major industry verticals means that users should consider i2 a candidate vendor for a wide variety of corporate initiatives where supply chain optimization forms the centerpiece. Contrary to its marketing message, i2 does not cover the same territory that ERP vendors do. At the very least, users looking for basic accounting functionality will need to shop elsewhere for a solution and may find that the supply chain optimization and Internet marketplace connectivity offered by vendors like SAP, Oracle, or JD Edwards fits their needs.

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