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Technology Stocks : i2 Technologies
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To: Shane M who wrote (1353)7/24/1999 7:13:00 PM
From: Wizard  Read Replies (1) of 2339
 
i2 has always been on the cutting edge of more efficient supply chains which are now called 'trading communities.' Trading communities are about increasing return on capital through more efficient supply chain management. They are entirely linked. It is evolving but i2 has built a R&D house spending $125mm this year to invest in the future of 'trading communities.' Most large corporations are not entirely web-based and while that is the overwhelming trend among start-up's (pure web-based architectures), i2's customer base is not going to get there anytime soon.

The risk is probably transitioning to new software pricing structures and such to figure out the financial model associated with the new world.

i2 was ahead of its time in thinking about enabling e-commerce. They called it supply chain management but this has now evolved to include partners and i2 has an organization built to mold to the new world. There is risk to i2's model but i2 has much better revenue diversification today than they used to and the stock is the same place it was in April, 1998 despite growing revenues another 50%+ and spending big on R&D during that time.

i2 is a franchise software company and while I don't know how the stock is going to do in the near-term, I think i2 will be a solid relative performer over next twelve months from recent low $30's.

The quarterly risk is quite high, but as Sanjiv said, its not for a lack of pipeline.
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