Ariba-Agile deal kicks i2 where it hurts
Everything you wanted to know about b-to-b
January 30, 2001 03:00 AM ET
upside.com
What I think I know about the b-to-b sector:
In case you slept through yesterday, Ariba (ARBA) made the first big b-to-b news of 2001, announcing the $2.4 billion acquisition of Agile Software (AGIL). (See "Ariba buys Agile to boost b-to-b credentials.")
The sexy stuff
Let's cut to the sexy stuff: How is the Ariba-Agile merger playing down at the Big D headquarters of i2 Technologies (ITWO)? (If you forgot, Ariba and i2, along with IBM (IBM), are partners in an embattled b-to-b joint venture dubbed the Alliance.)
In typical i2 fashion, a company executive dissed it, insisting that i2 can already do everything that the combined Ariba and Agile offer, and then some.
"We were surprised because everyone expected Ariba to make a move to address deep supply chain issues," says Jennifer Tejada, i2's vice president of marketing. "Instead, the Ariba-Agile deal is a narrow point solution that doesn't help them much beyond the high-tech industry." (Agile is best known as a software provider to high-tech and electronics manufacturing firms.)
Wait, there's more.
Ariba's acquisition of Agile "does increase the competitive overlap between Ariba and i2, and decreases our ability to partner, she adds. And while Tejada stresses that i2 will work with Ariba-Agile if and when a customer requests, "We are seeing increasing situations where we compete with them."
Trading barbs
Ariba, for the most part, is letting its deal speak for itself, refusing to trade barbs back and forth with its erstwhile b-to-b partner.
I say for the most part because Ariba executives went out of their way to talk about synergies with i2 on Monday. But in a later interview, I asked Ariba President Larry Mueller to respond to the months of darts thrown by i2 executives in his company's direction, especially the nasty comments made by i2 Co-Chairman Romesh Wadhwani two weeks ago.
"The comments don't really upset me. I find them humorous," says Mueller. "In fact, I expect them because they're a reflection of the person making them."
Ooooh.
Mueller believes the Ariba-Agile deal will soon be seen as a blockbuster because the combined companies can show proven results from satisfied customers today. I2, he believes, is still relying a lot more on flashy PowerPoint slides than e-business software that actually exists.
"I2 has a great marketing machine. I applaud them for that," he says. "But the company is coming from a legacy, back-office software background, so it must reposition itself. Now, i2 is trying to sell an intergalactic supply chain vision that covers every e-business process… Ask their customers what's been actually delivered, and you find that customers haven't seen anything."
Ouch.
Bottom line: I2 has enjoyed acting like the b-to-b bully over the past six months, kicking sand in Ariba's face and generally grabbing the spotlight. With its purchase of Agile on Monday, Ariba enrolled in its own Charles Atlas course, and proved it won't take the abuse lying down. This rivalry is only getting started, and with Monday's deal, it becomes a lot more interesting.
What about Commerce One?
Now that Ariba has made its move, will Commerce One (CMRC) follow? Ariba's big rival has a tight relationship with SAP (SAP), but some analysts believe the German software giant is a bit weak when it comes to the kind of collaborative commerce software sold by Agile.
So, what's Commerce One to do? It could make an acquisition of its own, of course. Or maybe it's SAP that inks a deal. Either way, the companies could share the wealth. Targets? How about privately held Nexprise, which is already working with Commerce One at Covisint, the automotive industry exchange. Then there's MatrixOne (MONE), often cited as an Agile competitor (more on that below).
But maybe Commerce One doesn't have to do anything. The joint products it has developed with SAP are being sold to customers who want to build private marketplaces. So with some tweaking and/or upgrades, it can offer the same capabilities as the Ariba-Agile newlyweds.
And then there's MatrixOne...
What does Monday's deal do to the partnership between Ariba and MatrixOne? Nothing much yet, seems to be the answer. Agile and MatrixOne are lumped in the same bucket, but the two companies don't necessarily compete.
Simply put, MatrixOne software is used by a manufacturer to build an Internet platform that allows its engineers to share product design information with engineers or designers at another company (a supplier, for example).
Agile software kicks in once the product has been designed and a company wants to take those design plans -- and the bill of materials used to build the product -- and share it with suppliers or contract manufacturers.
Earlier this month, Ariba and MatrixOne partnered to win business from electronics industry e-marketplace e2open. The two companies, now joined by Agile, will continue to seek deals, says MatrixOne Vice President Paul Gilmartin.
But at the same time, the MatrixOne-Ariba partnership is not exclusive, and while Gilmartin won't provide details, he says the company is working with other b-to-b software providers (and Ariba rivals).
Stay tuned, I guess, but it's safe to say that MatrixOne, not a very well known company to this point, will now find itself the subject of takeover rumors. Wouldn't it be interesting if i2 swallowed MatrixOne?
Adam Feuerstein covers e-commerce for UpsideToday. Reach him at adamf@upside.com. If you would like to submit a letter to the editor regarding this story, email online@upside.com.
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Hi, Shane good to hear from you. MONE looks like an interesting company. Have you heard of them?
Regards,
Denis |
