Why I sold my long shares of Nokia this morning and decided to go short on the stock....
Wow! Did that grab any attention?
Actually, it is not true.
Rather, I just want to interject a couple of thoughts on some issues raised about Ariba and i2 within the B2B segment lately. I simply haven’t had enough time to respond, but I will offer a few tidbits. I continue to believe that due to the location of the technology adoption life cycle for the gamut of B2B, that a basket approach makes the most sense to me at this stage of the game. The obvious place to start is Ariba, CommerceOne, i2, Siebel and Oracle before branching out into other segments of the space. I’ve been spending a lot of time studying CommerceOne in the past week while I’m planted here next to their head quarters in Walnut Creek. I continue to remain ‘glued’ to the premise that it is simply too soon to be crowning any of the players as the ‘king or the gorilla’. That is, depending on your intrepretaion of the infrastructure required to facilitate various segments of the business to business boom. The growth wave potential is going to carry a lot of things with it until we get to the 'end' winners and chimps. Keep in mind, the entire collection of niche markets and players will dwarf the client/server enterprise application market of the 90’s. Yet, good news for us, many of those players are directly involved in the B2B technology adoption life cycle and have their solutions already ported to portions of the zero install client computing architecture. This is why I continue to ‘urge’ myself to hold on tightly to my shares of i2, Siebel and Oracle with a iron clenched fist. We could make the case for PeopleSoft and SAP's participation, but I see no compelling reason to own those two companies for myself. None of this is a recommendation by any means as we all have to draw our own conclusions through rabid study of the space.
Here are a couple of recent developments via URL’s:
Piper J’s reason for upgrading CommerceOne this morning:
siliconinvestor.com
i2’s signing of ToysRus.com for their TradeMatrix™ solutions:
siliconinvestor.com
In response to Lizzie and Benjamin's opposing view of mine, I will submit a very small portion of a report I have been working on and some notes concerning i2 to explain a little bit about i2’s TradeMatrix™ since the ToysRus.com signing seems appropriate to use as an example. Keep in mind my report is geared for investors that need all of the terminology explained from square one, so I apologize to this group for the level of explanation, but don’t have time to water it down at the moment for this group.
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Here’s from the company’s own description:
“TradeMatrix™ builds and supports digital marketplaces with services, content and technology that optimize your core processes, connecting you to partners, customers, designers, industry leading sources of content and to the entire TradeMatrix™ community.” - TradeMatrix™.
What does that mean? We all know what that a portal is a gateway or an entrance into something. i2’s portal is entitled TradeMatrix™. This is their unique platform which spans multiple marketplaces and supports each of those marketplaces with what i2 calls their intelligent B2B and B2C services and software. It’s time for more terminology explanation. You’ve already learned that B2B is the abbreviation for business to business transactions. Now we are faced with B2C which is the abbreviation for business to consumer transactions. An example of B2C would be Amazon.com. If you order a book, a movie, a CD, an electric drill, a tube or two of toothpaste, a new sofa, a stove and matching refrigerator, a grill, a riding lawn mower, a bird feeder, a Persian rug, some software, a video game or get a prescription filled - it’s all under the e-tailing domain of B2C or business to consumer transaction. Did you know you could do all of that shopping at Amazon.com? There is also a C2C transaction. The C2C is an abbreviation for consumer to consumer. This is a market place that brings together the most common form which we call an auction or classified section. The “flea market on the Internet” which is well known for the C2C structure is eBay. Amazon.com also has auctions as well as Yahoo!. Regardless, all three types of transactions require software solutions to make happen. Be it B2B, B2C or C2C - it has to "B".
i2 provides the e-portal vehicle for independent trading exchanges for online business to business transaction under the umbrella of the TradeMatrix™ family. The TradeMatrix™ solutions can be tailored to address both the vertical and the horizontal trading communities via i2’s electronic market places like HightechMatrix™, SoftgoodsMatrix™ and FreightMatrix™. Before we go on, let’s identify and define those two new words in italics. Vertical is a term that is used to describe a trading exchange within a specific industry or sector. Horizontal is a term used to describe a trading exchange that might involve many industries or sectors.
What types of industries have signed up to use these independent trading exchanges? Nike uses i2’s TradeMatrix™ platform. Sun Microsystems uses it. Hewlett-Packard uses it. Barnes & Noble uses it. Alliant Foodservice, Inc. uses it. United Technologies Corporation, Honeywell and i2 have developed MyAircraft.com™ which addresses replacement parts and services for the aerospace industry. i2 and Toyota Motor Sales have done the same thing for the automotive industry with iStarXchange™. TradeMatrx™ is also an ideal platform for many of the dot-com companies. There is also AT&T CanadaMarkeplace™ devoted to developing intelligent Internet e-business in Canada, e-gateMatrix™for airline catering and travel related industries, HomeElectronicsMatrix™ for the consumer electronics and consumer durables industy, SoftgoodsMatrix™ is for the textile and apparel industry, FreightMatrix™ is for the entire freight and shipping industry and HightechMatrix™ is for the semiconductor as well as the computer and high tech electronics industry. i2 launched a program entitled Planet 1999 which has continued this year as Planet 2000 to travel the globe and promote intelligent e-Business through the i2 solutions family.
How are leading companies in every industry becoming B2B powerhouses?
•The most services.
•The most content.
•Spanning multiple open marketplaces on the Internet.
Only TradeMatrix allows enterprises to not just trade, but plan for success, leveraging the most advanced and proven technologies for building digital marketplaces.
Find out how companies build the future of B2B commerce, fulfill customer demand, and gain marketshare today through TradeMatrix.
"i2 (Nasdaq:ITWO) is the dominant player in the B2B marketplace space. They have a core supply chain planning capability that has fueled their growth to almost a $1 billion revenue company to date. This underlying supply chain technology lets i2 create intelligent marketplaces." - Chris Rowen, Research Analyst at The Robinson-Humphrey Company, as quoted in the Wall Street Journal
TradeMatrix is the world's most comprehensive B2B solution. TradeMatrix is the first business portal to offer value-added services that span multiple digital marketplaces. These value-added services address all facets of business to ensure that you are a better supplier to your customers, and your suppliers are better suppliers to you. TradeMatrix uniquely leverages advanced optimization and execution capabilities to improve decision making about buying, selling, and everything in between.
TradeMatrix intuitively handles diverse workflows and market mechanisms, creating a one-stop destination for all dynamic trading. For example, buyers can procure both direct and indirect material and services. TradeMatrix is built on open standards, enabling the participation of leading marketplace partners and technologies. This combination allows TradeMatrix to offer its partners unprecedented value and time-to-market with the solutions required by today's high-velocity business.
Who benefits from TradeMatrix?
TradeMatrix Procurement services offer buyers the most expansive catalog of products and services for Direct and Indirect needs by spanning existing digital marketplaces. Beyond the catalog, TradeMatrix uses advanced optimization and execution capabilities, consolidating the buyer's requirements to significantly reduce total purchase costs, while helping to ensure that ordered items are available and delivered on time.
For sellers, TradeMatrix Commerce services radically expand market presence with reduced effort by exposing commerce in one marketplace to all potential buyers. Superior brand management is achieved through portfolio-building tools that syndicate across multiple product lines and marketplaces. These services increase revenues and margins while increasing the seller's market responsiveness.
TradeMatrix Fulfillment services help both buyers and sellers improve responsiveness and agility. Successful fulfillment requires insightful planning and superior execution, which fosters meaningful, long-term business relationships. TradeMatrix Fulfillment services increase total revenues and profits by directly linking the value-added service into the buying, selling and planning processes.
For designers, TradeMatrix Product Development services provide a planning hub for internal development projects, market feedback and customer collaboration. Product management and product development quickly gain new insights and streamline collaboration with trading partners. These services significantly reduce time-to-market, while efficiently aligning product and service offerings with profitability goals.
TradeMatrix Retail services address the complexities of retail, whether online or brick-and-mortar. Retailers can more effectively plan and shape demand, then ensure the right products are available without any unnecessary risk or costs.
TradeMatrix Planning services allow companies to manage the complexities of their environments without sacrificing customer service or profitability. In today’s business climate, companies need to respond to change quickly and effectively. TradeMatrix Planning services allow them to optimally position their resources to capitalize on market opportunities.
And of course, the end customer benefits from the responsiveness, cost efficiency, and product selection TradeMatrix enables for companies who trade and collaborate through these dynamic marketplaces. TradeMatrix Customer Care services ensure the end customer is satisfied after the sale as well.
Examples of value-added features TradeMatrix provides:
Multiple line-item consolidation across multiple vendors
Integrated logistics services including optimized landed cost calculations and order tracking for multi-line item orders
Real-time integration with back-end fulfillment processes
Aggregation across multiple marketplaces and sites
Support of strategic partnerships through collaboration processes
Management of design processes
Fast time-to-benefit for collaboration and optimization functionality with low initial investment costs
TradeMatrix: a partnership for success
No single company can build a solution of this magnitude alone. TradeMatrix combines the experience and expertise of world-class eBusiness solution providers dedicated to creating value on the Internet. Powered by i2, TradeMatrix encompasses leading Content, Technology, and Infrastructure providers. Leading Marketplaces designed to meet industry-specific and business process needs, developed by marketplace providers including i2 will be part of TradeMatrix.
What do you need to get started?
Since all TradeMatrix.com solutions are provided as online services, many users can leverage them through a browser. Services are provided on a by-use basis, through custom-designed applications or joint development. TradeMatrix offerings are also designed to be integrated with powerful business optimization systems (such as i2's Intelligent eBusiness solutions) and interact with back-end order management and ERP systems.
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My entire report is coming in around 28-30 pages, so this is just a small sample from that report and some of my notes. However, I just wanted to point out that my conclusions may not meet the conclusions of others. However, based on my study of technology adoption life cycles, I am unwilling to be picking the gorillas and chimps in niche markets within this huge area so early in the game. Call me stubborn on that point, but real money is at stake. None of the above is intended as any sort of a recommendation. However, it was designed to illustrate the well managed tactical strategies that i2 has been working on over the past 3 years to position themselves for an exciting decade ahead.
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