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.