SCEM Software Maker Tilion On the Ropes

After furloughing 20 of its remaining 28 employees last week, Tilion is looking to either rebuild the company, sell its assets or merge with another company.

In early 2000, Novell Vice Chairman Chris Stone left his post to join the new economy. Not a month into the new millennium, he founded Tilion Inc., a supply chain visibility software company.

After two years at the helm – and no customer in production to show for his efforts - Stone left Tilion in February to return to Novell.

Before Stones departure, Tilion wasnt faring well against the supply chain event management competition, and last week the company essentially closed its doors.

Tilion laid off 20 of its remaining 28 employees last Friday afternoon. (At its peak Tilion employed 90.) Left to run the company are president and CEO Peter Shields, the companys CFO and a handful of engineers.

The skeleton crew is working to either rebuild the company, sell its assets or merge with another company, according to president and CEO Peter Shields.

Its been a combination of the economy and the fact that people bought a lot of software a year ago and spent a lot of money on the likes of i2 Technologies – a pure play competitor to Tilion – that put the company in dire straights.

"Now companies want to make what they have work," said Shields, "and thats where theyre investing time and resources, in addition to time and budgets being slashed."

Focusing on logistics and supply chain event management, Tilion offers three prepackaged solutions of analytic views and exception alerts. Each solution – Logistics Execution: Inbound Freight, Logistics Execution: Shipping Performance, and Supply Chain Execution: Inventory Management – also contains a configurable exception alert that notifies the user when performance falls below a threshold, or a specific event occurs.

Tilion, based in Maynard, Mass., still has some cash in the coffers to push along plans with interested companies.

Of the $46.5 million raised in two rounds of venture funding, Tilion has an excess of $15 million remaining.

Shields is not certain how the money will be spent.

"It depends on what avenue we take," said Shields. "If we retool with the existing engineers, well use it to build product. If we merge, it will be used to invest in new technology."

Both options are feasible, says Shields, especially given the current climate where there are companies with good ideas that cant get funding, as well as a few good companies that are looking for good technology and cash.

A former CFO, Shields is reluctant to even speculate whom a partner or buyer might be.

"We would want to find someone who could compliment [our products]," said Shields, "someone who has products and customers. They could be as big as an ERP or a niche supply chain vendor that needs some of our technology. Both are equally likely."

Shields said the company has no specific timeline in mind. He wants to do the right thing at the right time, and evaluate each situation as it comes along.

"If something is right, well act," said Shields.

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