SCM software market enters consolidation phase

David Hannon -- Purchasing, 4/6/2006

Competition and consolidation is picking up in the supply chain software market, as several major acquisitions rounded out the first quarter. A recent report from industry analyst Frost & Sullivan says "there are signs of consolidation in the supply chain space due to the evolution of software suites, which are cost-effective and have minimal integration issues."

"Competition in the supply chain space is intensifying mainly after the entry of ERP vendors, who provide end-to-end solutions which incorporate SCM functionalities within them," notes Frost & Sullivan research analyst Raja Srinivasan in a recent report. "The fragmented market is entering into a consolidation phase which is evident from the recent mergers and acquisitions and this trend is expected to continue in the near future."

Business intelligence giant D&B opened its checkbook and acquired supplier ratings software firm Open Ratings in Waltham, Mass. for $8 million, funded with cash on hand. Open Ratings provides Web-based supply risk management solutions to leading manufacturing companies. "We're committed to providing solutions that enable customers to monitor and mitigate risk in their portfolios," said Jim Burke, leader of global solutions at D&B. "Through this acquisition, we will combine Open Ratings' analytical capabilities in supply risk management with the power of our DUNSRightdata capabilities to provide customers with a more comprehensive supply management solution."

SSA Global Technologies acquired Provia Software a provider of order-to-delivery supply chain execution (SCE) solutions. The acquisition of Provia provides SSA Global a small-to-medium market SCE solution that affords a cost-effective approach for distribution-intensive companies. "Through the Provia acquisition, SSA Global increases its current position in supply chain management by bringing new capabilities to companies in industries we already know and serve," said Mike Greenough, chairman, president and CEO of SSA Global. "SSA Global offers Provia customers and prospects an SCE solution supported by the strength and financial viability of a large software solutions partner."

A subsidiary of i2 technologies has acquired the assets of supply chain software firm RiverOne. The company's software helps high-tech companies manage and control partner-based business operations. RiverOne's customers, focused in electronics, ranged across all supply chain roles and sizes from small subsystem OEMs to the largest EMS providers. "Supply chain management today is a multi-enterprise challenge. The next generation of supply chain solutions must address multi-enterprise business processes," said i2 CEO Michael McGrath. "This is also strategic for i2 because it allows us to further expand our customer base in electronics manufacturing where i2 has a significant market share."