Slim pickings for SAP,BAAN & MANU,is that good for i2?
Michelle,
It appears misfortune has befallen the ERP vendors lately,does that necessarily spell good fortune for i2?I know ERP and SCM/eBPO are
different but I am trying to figure out whether there is any substantial benefit that i2 can derive from the misfortune of these guys.
(i2 on the other hand seems forging ahead in the wake of the turmoil in the ERP segment,what gives?)
Following are some bad news from BAAN and MANU and we know about SAP already,so there.
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Online News, 01/20/99 07:07 PM)
(1) Baan warns of Q4 loss
By Craig Stedman
Struggling ERP vendor Baan Co. today warned that it expects to post a $250 million loss for the fourth quarter of last year. The company also said the third-quarter loss it originally reported will be 50% larger because of an accounting change related to a takeover that took place last year.
Baan, based in the Netherlands, said charges stemming from a previously announced 20% workforce cut and other restructuring moves will account for about $160 million of the expected fourth-quarter loss. The company also said it is reducing revenue for the quarter by $50 million to account for previous software shipments to resellers that have yet to be sold to end users.
That is expected to leave Baan with fourth-quarter revenue of just $142 million, down 34% from $215.6 million in the last three months of 1997. The enterprise resource planning (ERP) applications vendor reported a $30.8 million profit in the same quarter in 1997.
Baan said its 1998 third-quarter loss will expand from the original $31.7 million to about $47.6 million because of the new method of accounting for its purchase of software vendor Caps Logistics Inc. The accounting changes were necessary because of recent sales of Baan stock by the investment firm of co-founders Jan and Paul Baan, who had pledged some of those shares as collateral on loans.
The stock sales reduced the Baan family's ownership of Baan from 39% to about 25%, the company said. To further cut ties between the two, the investment firm run by the Baan brothers -- who have given up their management jobs at the ERP vendor -- will drop the Baan name from all of its businesses. In addition, Baan is buying a reseller of its software from the investment firm for a price ranging from $34 million to $82 million.
Before April, Baan said, the company also expects to buy unspecified other companies that resell its applications from the Baan brothers. The relationship between Baan and the investment firm became problematic last year after questions were raised about whether Baan was using sales to resellers controlled by Jan and Paul Baan to prop up its own financial results.
Baan, which has its U.S. headquarters in Reston, Va., isn't the only ERP vendor that is stumbling financially. For example, market leader SAP AG earlier this month disclosed that its pretax profits for last year's fourth quarter are expected to drop 15% from 1997 levels. Both SAP and PeopleSoft Inc. have warned that their revenue growth is likely to moderate this year.
But Baan is in much worse shape than any of its major rivals. The Dutch company has had trouble navigating a transition that aims to focus on midsize users at the same time that it's trying to tie together its flagship back-office application with a mix of other software packages bought in recent years.
Baan said it did manage to sign new software license commitments amounting to $100 million in the fourth quarter. It added, though, that year-end financial results will be delayed to an unspecified date because of the complexity of the restructuring and accounting changes being made.
However, Baan doesn't appear to be in danger of a total financial meltdown and is starting to look like ''a much more conventional company than we saw the last few years,'' said Jim Shepherd, an analyst at AMR Research Inc. in Boston. ''It's not a company that I'd characterize as circling the drain.''
But some of Baan's financial maneuverings ''are still mystifying to me,'' Shepherd added. And Baan still needs to spell out a rational strategy for integrating the diverse mix of products that currently makes it look like ''the strip mall of the applications industry,'' he said.
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(Online News, 01/20/99 09:31 AM)
(2) Manugistics slashes 400 jobs, seeks new CEO
By Craig Stedman
Struggling supply-chain software vendor Manugistics Group Inc. yesterday announced a 30% workforce cut and a series of management changes after giving up on efforts to find a buyer. The management shake-up includes a plan to recruit a new CEO to take over that spot from William Gibson, although Manugistics said Gibson will stay on as its chairman. Two other executives who had headed up end-user sales and consulting services have left the Rockville, Md., company.
The layoffs will eliminate 400 jobs at Manugistics, which is narrowing its marketing focus to supply-chain applications involving consumer goods and electronic commerce.
Manugistics lost $24.9 million in the first three quarters of its fiscal year ended Nov. 30 and last month disclosed that it was talking with other software vendors about a possible takeover. But those talks ended last weekend, said Manugistics, which expects to take a $60 million charge in its fourth fiscal quarter as a result of the restructuring moves.
(Source:ComputerWorld)
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