Monthly Archives: November 2012

Blackberry…yes they are still around…with their new phone

So the new Blackberry 10 will soon jump into the smart phone battle ground. And it … surprisingly …. shockingly …. looks like an iPhone!!!

I have been on RIM’s case for a while now and this only reinforces my questioning of what is the future for the once mighty smart phone player. RIM needed to do something different, go in a radically different direction. Look at what Samsung is doing – they have a phone that is the size of a Kindle! But it is different. As well as having other phones that are bigger than an iPhone.  Even Microsoft has a phone that has very different look to it because of Windows.

This new Blackberry…looks like a wanna be iPhone. Now the operating system might new and “better”…but does that really matter? I say no. If you cannot get app developers to create apps for your phone than what does the OS matter? RIM needed to do something very different to try and change the trajectory they are on, unfortunately it appears that his new device will only ensure they stay on the course they have been on for a while now – the road to nowhere.


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Filed under Smart Phone, Wireless

Red Prairie “acquires” JDA, a $1.9billion gamble that is a company too far.

The supply chain and software worlds were thrown into a tizzy this past week with the announcement that Red Prairie and their primary investor, New Mountain Capital, would be paying a 33% premium to acquire publicly traded JDA software – click here for press release. This new entity will have a combined revenue of a $1billion, of course we all know that in the world of M&A, 1+1 does not necessarily equal 2 but sometimes more 1/2…This merger was kept under tight wraps. From what I understand no one, outside of a handful of individuals, knew about the deal until it was announced publicly. A testament to both companies running a tight ship. So what does this mean?

JDA has always been known as an acquirer of companies, most notably former supply chain darlings – Manugistics and i2. JDA’s modus operandi seemed to be – acquire tarnished brand, that has a good client base and technology. Apply JDA’s operational excellence and maximize margin on that revenue stream. Run that until the revenue stream slows down due to lack of innovation, and repeat. This is different in this situation. Granted Red Prairie is technically “acquiring” JDA. But the buzz on the street is really JDA is being taken private to merge with Red Prairie and be the dominate partner. This makes sense since the owners of Red Prairie have constantly sought a viable exit strategy for the software company. So under the protection of being private, JDA/Red Prairie will work to becoming the dominate supply chain vendor. But three things that need to be addressed

  1. Being private does not necessarily cure JDA’s problems. With Hamish Brewer running this new entity, there is much hope that being taken off the Wall Street carousel, will allow for a hard focus on SaaS and other necessary changes to the business to compete in the changing market. The question remains, is this in JDA’s DNA? They have not really proven to be an innovative company. They have always been an operational excellent business, but not a company that is going to take chances with innovation and R&D. With a spot light coming from an investor that just sunk a large chunk of money, the pressure might be greater than when it was a publicly traded company.
  2. Product overlap. Primarily what will the new business do with their TMS solutions? By my count there might be 3 versions – JDA’s, the old i2 and now Red Prairie’s version. Gartner and other analysts always ranked the i2 solution as one of the best, on the same level as Oracle’s GLog offering. This is not a trivial problem to deal with. There are other solution overlaps as well as matching R&D direction. In prior mergers it used to be clear that JDA was coming in as the dominate player. Not in this situation.
  3. Too big to succeed? Has this merger been one company too far? When JDA acquired i2, there was some noise that i2 and Red Prairie had explored merging instead (would have been a very powerful combination). An i2 – Red Prairie merger would have been a very powerful entity. The problem is that JDA is not i2, they are bigger! They have many more pieces that they have pulled together over the years. Adding a large piece like Red Prairie at this stage might have been too big a chunk to digest. A company too far.

This merger has much potential for both success and failure. Fundamentally both companies come to the table with pieces the other has been lacking. But I am just not sure that the cultures and the products will mesh in the near term. Going private is good, but I am not sure it will diminish the pressure on Hamish and his leadership team to get the new company on the right track.

JDA will no longer have the pressure to constantly grow revenue stream – through acquisition – but now they will need to get things in place for their investor to get a return on their $1.9billion investment.

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Filed under Current Events, Supply Chain