Beyond Category

Something has changed in the force…

At one time there were two big supply chain companies, Manugistics and i2 Technologies. The debate could rage on for years about who was first or who was best, but the story I know best was from the inside looking out and then from the outside looking in. Manugistics was my first real big software company job. Being there in 1997 was perfect timing (for everything except my options), as I learned so much and put myself in such a better position going foreward in this industry (not to mention meeting some really amazing people — and lets not forget the frequent flyer points).

I bring this up today because this afternoon, JDA Software announced that it's acquiring Manugistics for $211(million) in cash. I have a lot more thoughts around this. More later (possibly). Now in terms of free-standers, "…and then there was one." I am a little sad in a silly nonsensical (i.e. ilogical and stutupid) nostalgic sort of way. But, without this deal — what would they have done with the debt service staring down the hall at them?

I don't know much about JDA, I've seen a demo of their E3 product (if I take that on as a proxy, they know the retail space very, very well) and have seen the ERP-like AS/400 footprint they have sitting around working for years at retailers around the world. Per a friend, "it just works" (its a theme people, work with me).

Five things I took away (that I'm sharing now) about the conference call (password is "jda")

1. Hamish Brewer, JDA's CEO understands the space and (sounds as if) he understands how the deal will work.
2. The debt gets paid (talk about a sword of Damocles) — $180 million large — off the table
3. They believe that by taking the rumors off the table (that Manugisitcs is for sale); the sale announcement will open up any pipeline that was "held up" as a result of the rumors.
4. Yes there will be headcount reduction — there always is. These guy's (JDA's execs) would get murdered if they didn't.
5. Technology shift or emphasis for the first time to Microsoft SQL server. Support for SQL Server 2005 will be added right away. Techie boys and girls — that is important. The bet, a-la Vinne Mirchandani will be on SOA

A lot of Manugistics alum will be listening in on this call and wondering, "what next?" If done right, this deal will help Manugistics. The question remains around the "how" of the execution. The deal is not done, the dust will settle and there are a ton of SEC things going on — so don't be ticked off if no one plays nice until the lawyers and the SEC police back off.

Quiet period, clean room, or not, the world just changed and a lot more people have got to think about being nice to a lot more people now. The people factor is critical here — the expertise and the answers are not all in India.

The one question I have is this: when Oracle buys a company, its Oracle that you "throw through the window" and the acquired company is the trailer; the same with SAP, and other companies (SSA, Infor, etc). When two companies of the same size merge, who leads through the door? Their only overlap is in retail now — and that could be turned into something very healthy for both company's sales forces.
I am actually betting on Manugistics on this one — the "noise" will be abating, they will have a CEO who can provide the dynamic leadership that this company needs now. Somebody should be looking at WDS.

Sell on boys and girls and lets hope this clears the air.

UPDATE: Someone asked me to sum it up from a client's perspective, so here goes:

If you were a Manugistics customer you would worry about two things (1) if they were for sale and the uncertainty that would bring and (2) what will happen to them if they have to pay off $180 million in debt in 18 months or so?

Well now, the rumor is no more: they've been purchased by someone who sees value in their company and will make them more efficient AND pay off their debt. The "noise" and concern has abated. As a Manugistics customer, I'd have little to worry about right now. No one can predict the future…who knows what Google will do??

Later,

V

Thinking supply chain management is relegated only to the world of academics?  Today's Wall Street Journal (paid subscription required) has a lot to  say about how companies are managing and optimizing their operations via supply chain and deeper thinking about how they work. Among the high points of the article:

• Pinehall Brick Co., has started putting slightly larger holes in its bricks because lighter bricks take less power to produce.
• UPS stopped looking at its repair process in a blanket fashion,"The company found a blanket maintenance schedule was wasteful, since maintenance needs vary depending on the size and even the type of tires on a truck. The logbooks are already saving the company an estimated 330,000 quarts of oil a year" (from article)

Interesting note about where ROI thinking is going in company vis-a-vis energy prices, "Economists note that most companies are hesitant to invest heavily in new processes or machinery, particularly if that means funneling money away from other goals, such as new products. But as energy prices rise, the payback on such initiatives grows shorter, making them easier to justify." (article)

Don't think this is the last thing at $72 per barrel is going to do to us.

Later,

-V

"You hate people!"
"But I love gatherings. Isn't it ironic?"
-Clerks, 1994

I think I am "technology siloed" with an emphasis on my office and business related life. I have a few computers (a Tablet PC and a PowerBook), Voice over IP Telephone from Vonage, a sleek little Blackberry phone, a small audio setup for podcasting (why I needed 2 microphones, I'll never know), a 2-line phone, a wireless (and wired) router (yes connected and secure), and a networked laser printer. That's all I can see from here.

However, just yards away languishes my 15-channel deep analog (non-digital) cable, a CD player, I did get a DVD player last fall from Target for $29… Oh yes and not to be left out my 19" Zenith tube TV I bought in 1994.

The "Digital Divide?" My friends, I am the Digital Divide.

I didn't realize I had this problem until i was thinking through my cancellation of Netflix. Yes, I got it an it got bad. First, 1 movie a month, then 2 and then 4 at a time… I was in heavy rotation. I knew I had a problem when I began to run out of movies to watch, when I caught myself debating the high points of this movie...

I mean I got it because I didn't watch enough TV to "get" TiVo, so I had to have something hip to at least talk about. Then, it got old so I went and cancelled it. Cold Turkey. Its nice, I feel back in balance again, divided but in balance.

Funny thing is…I watched more than half the movie on my laptop PC in my office.

I am so pathetic.

This, believe it or not is not an exercise in self-abuse, its more a thinking of how we use technology and how we use it and don't even know we do. I mean I had to go out, in outfitting my office technology, fit the device to the purpose and see if it really worked. I did tons of research by provider and by product (I even bring in all the software to bridge the technology to get it to work for me).

TiVo is an exceptional blend of hard drive technology, networked subscription, and broadband "piggybacking". Yet to most people, research wasn't done. They wanted TiVo, and they went out and watched it and get this: IT JUST WORKS.

Why doesnt most enterprise technology work like this? What is the big hassle? Where is the "better answer" for which everyone is looking? It's in there. Don't get me wrong, but the average buyer, either during a sales cylce or as its being implemented, has to not only get that better answer, they need to understand how. The Problem is the soup of details is often so thick for the average buyer they might as well scream "I'm mad as hell and I'm not going to take it anymore" to their enterprise software vendors.

You try it.

Go to your window (or your blog) and say it.

What's that you hear?

Crickets?

Yes and that's not just because of the vendors (they don't help things), but there are a lot of companies that make things a bit more complicated than they need to; and no vendor would want to miss that one customer that wanted that "one feature"…so they muck it up with complexity.

In a way, the enterprise market (vendors and customers) are "technology siloed" a bit like me (are you scared now?).

A C-level team will license and implement the most complex software schemes possible for their businesses without issue. Those self-same executives will zip home, flop down in front of their flat panel televisions watch a bit of TiVo (or their DVD from Netflix), and possibly work out at the gym on their digital treadmill while listening to their iPods. These things all "just work."

How can we look at the stuff that "just works" in one place and accept, almost without question things that just dont elsewhere?

"I thought you wanted the software simple?"
"I do want it simple, but I love the things the complex stuff promises. Ironic, isn't it?"

Later.

-V

UPDATE: This just in. I found an example of something that "just works" see Andrew McAfee's blog at Paragraph 7 of his April 10 blog posting