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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.