Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Market Gems-Trading Strong Earnings Growth and Momentum -- Ignore unavailable to you. Want to Upgrade?

To: Dave Gore who wrote (5562)	2/28/2001 10:00:27 PM
From: puborectalis	Read Replies (1) \| Respond to of 6445

Ariba cuts ties from i2 with new B2B strategy By Siobhan Kennedy NEW YORK, Feb 28 (Reuters) - Ariba Inc. (NasdaqNM:ARBA - news) on Wednesday all but closed the door on its alliance with i2 Technologies Inc. (NasdaqNM:ITWO - news), outlining a strategy for business-to-business electronic commerce that decreases Ariba's dependence on i2 and puts the two firms in closer competition. ``The divorce is final,'' said Bob Ferrari, an analyst with Boston based AMR Research. ``Clearly Ariba is saying it can do this without (i2's) supply chain software.'' i2 and Ariba got together with International Business Machines Corp. (NYSE:IBM - news) last year to form an alliance to target the market for online marketplaces. But ever since that time, analysts have been predicting a break up between i2 and Ariba as the two continue to introduce software that encroaches upon each other's territory. Speaking at a press and analyst conference in New York, Ariba's president and chief operating officer, Larry Mueller reinforced that view by downplaying the importance of i2's supply chain management software, which helps companies cut costs by more efficiently planning their purchasing requirements with suppliers. ``The supply chain is important,'' he said. ``But it has limited perspective.'' Mueller said the future of electronic commerce wasn't about internal plans and efficiencies, which is what companies like i2 and German software giant SAP AG offer. ``Future competitive advantage is driven by inter-enterprise process improvement,'' he said. ``It's all about partner relationships and creating value by connecting companies.'' That market -- what Ariba is calling Value Chain Management -- is estimated to be worth around $42 billion by 2005, according to Ariba. The company based the estimate on research it compiled in conjunction with analysts firms including AMR and International Data Corp. Morgan Stanley's top rated analyst Charles Phillips said Ariba did a good job of contrasting itself against ``last generation applications,'' and positioning itself as a provider of networked-based collaborative applications." ``Today was a much better defined Ariba strategy,'' Phillips said, adding that, at the moment, i2 does not have any products that fit in the collaborative commerce space. ``For the areas they (Ariba) are focused on, it puts them in the lead,'' Phillips said. Letting companies collaborate over the Web was the driving force behind Ariba's recent deal to acquire Agile Software Corp, which will give the company a firm footing in the market for software that lets manufacturers share product information with their suppliers across the Internet. Then on Wednesday, Ariba sought to extend that capability by announcing a reseller agreement with Synchra Systems, a maker of software that lets buyers and suppliers communicate more efficiently about inventory levels and purchasing requirements over the Web. While neither deal brings Ariba into direct competition with i2, both agreements bring the two vendors closer together by pushing Ariba into the market for direct procurement -- the purchasing of raw materials and components -- which is i2's mainstay. Up till now, Ariba has only played in the indirect procurement market which automates the purchasing of office supplies and services over the Internet. Citing IDC research, Mueller said Ariba had 32 percent of that market, or 2 million users, and was looking to increase that to 40 million by 2005. But he admitted the real opportunity was in the direct space, where inefficiencies in procuring raw materials cost manufacturers billions of dollars a year. ``Indirect procurement was the low-hanging fruit, but that's all gone'' said David Hilal, an analyst with Friedman, Billings, Ramsey & Co. ``Ariba's recognized that but the question is whether or not it can deliver on its new strategy.''

To: Dave Gore who wrote (5562)	3/1/2001 11:37:59 AM
From: Lane Hall-Witt	Read Replies (1) \| Respond to of 6445

Thanks, Dave. I think you're definitely asking the right questions, and I've gained a lot from your own efforts to answer those questions. Speculative frenzies are strange things. I'm not sure if the lessons to be learned are ultimately any more profound than the platitudes we all carry with us every day: take profits, set stops, don't fight the tape, the trend is your friend, etc., etc. I picked up a handful of Internut stocks in 1998 and 1999 and felt stupid doing it, because the real business valuations didn't warrant owning those names. I wasn't feeling so stupid in the Winter of 1999-2000 when I sold them, though. In the final analysis, the "value" of a stock is what someone else will pay you to take it off your hands. Sometimes traders use fundamental analysis to root their buy and sell decisions, and other times they use the greater-fool theory. The important thing is to know which trading logic is in effect and play the game accordingly. I, personally, also think that speculative frenzies can be good for the economy over the long term. Railroads, automobiles, consumer electronics, and the Internet all became central components of our economy in large part through the speculative frenzies they stimulated. These frenzies attracted the capital that enabled the rapid buildout of these technologies, and also generated the excitement that urged individuals and businesses to adopt these technologies. Businesses today wouldn't be racing to incorporate electronic B2B capabilities if it wasn't for the speculative frenzy surrounding the dot-coms. Did the dot-com frenzy lead to a degree of capital misallocation, financial volatility, and some heartbreak among investors who got in high? Yes. But it also led to the incredibly rapid adoption of new technologies that make our businesses much more efficient than they once were. This will have important economic ramifications over the long run. I always thought it was a bad rap when we called the dot-com frenzy "Tulipmania" -- because the dot-com frenzy was really generating technologies that will provide the infrastructure for future communications and information management. The tulip craze created nothing of enduring value.