eWEEK content and product recommendations are editorially independent. We may make money when you click on links to our partners. Learn More.
Supply-Chain Management (SCM) software maker i2 Technologies Inc. is working to become a powerhouse in a market that up until now has been a two-horse race. The SCM supplier jumped in with its agreement to acquire RightWorks Corp., the No. 3 player behind leaders Ariba Inc. and Commerce One Inc., in the Internet markets platform game. Due to its depressed stock price, i2 snagged RightWorks for what seems like a song—$114 million in a stock swap deal of 5.3 million shares of i2 stock.
RightWorks biggest investor, Internet Capital Group (ICG), last year bought a 54 percent stake for $22 million in cash and $635 million in ICG stock.
RightWorks gives i2 the missing procurement piece that it had partnered with Ariba to provide. I2 plans to integrate RightWorks six applications, which span e-procurement, content management, auctions and sourcing, into TradeMatrix, its SCM platform.
On the heels of the acquisition, i2 worked out a deal with webMethods Inc. to integrate webMethods enterprise application integration software into TradeMatrix.
Application integration—webMethods domain—is probably the toughest task for corporations when they try to extend their supply chains or participate in a marketplace. “Public and private marketplaces have the same challenge but in reverse, and its all about integration,” says Wayne Goodreau, senior research associate at the Aberdeen Group.
The pair, which have been marketing partners in the past, also plan to do some joint product development and may bring third parties, such as other software developers or systems integrators, into their pact, says Debbie Rosen, VP of business development at webMethods.
That brings to mind the i2-Ariba-IBM triumvirate that i2 ended with the RightWorks acquisition. The relationship between i2 and Ariba was on the rocks, but i2s partnership with IBM is still intact. “We dont expect this to affect our relationship with IBM in any way. IBM remains a close partner,” says Romesh Wadhwani, i2s vice chairman.
I2s recent moves have the potential to redraw the e-marketplace map. The industry is now rushing to attack collaborative commerce, essentially the trading of direct goods and materials—a much bigger opportunity than the indirect goods procurement that Ariba and Commerce One initially focused on. Thats why Ariba bought Agile Software Corp. for its collaborative product design capabilities. For its part, Commerce One has a very close relationship with ERP vendor SAP.
The change in focus from indirect to direct goods has leveled the playing field and given a lift to SCM makers like i2, which already have software with some of the needed collaborative commerce and supply-chain functionality. And now i2 has the procurement and application integration pieces, too.