M&A deals keep flowing. In this issue, we have written about several that went through in the last few weeks, representing a transformation of PLM to a broader scope in the value chain.1
From Demand to WMS/fulfillment to transportation systems, it’s time to take stock of who’s driving the investment in solutions. Of course, we hope it is the good judgment of product managers who are closely aligned with their customers’ needs. But we do know that some ‘slash and burn’ investors like the character Lawrence Garfield in Other People’s Money2 or James Salinger, the CEO in The Company Men3 do exist out there. Fortunately there are plenty of growth equity firms out there who want to support the best in the market.
In the table below, we have provided a list of current software firms and their investors. It is incomplete, but it gives you a flavor of the market and ownerships. There are still a lot of private companies (which generally means there is enough customer demand to sustain these companies on their own) and public companies. As a result, the supply chain market is not as dominated by private equity firms as the ERP market, for example.
Founder-led companies often demonstrate that the vision and drive to solve supply chain problems is a day-to-day preoccupation, not handed off. Also, the dynamics of the M&A market (which may mean employee defections from the new parent) provide an active market for talented people to work at leading companies. Customers, therefore, have real access to some of the brightest minds in the industry. Take advantage of that, say many of the end-users we talk to. Unlike the fields of big consulting or ERP, where access is limited, the advice and oversight that ensure customer value tend to be more sustainable in this market.
Examples of Companies in the Supply Chain Market
Software Firm | Investor(s) | Category | Comments |
| Though the Saints have now come marching in, the previous PE was Safeguard Scientific. Acsis has been a presence in the auto-ID and traceability market for over a decade, evolving from a service-based firm with mega- customers like DuPont, Coca-Cola and Big Pharma customers to a SaaS-based manager of Value Networks ensuring brand protection and visibility as products move through the chain. | ||
JMI Equity lead as well as others | Last Mile Logistics | More about Airclic’s evolution can be found in Wikipedia. | |
SAP | Indirect Procurement | SAP’s recent acquisition of Ariba took it out of the public company domain; so far, though, SAP is content to allow Ariba to still operate as a separate unit, while leveraging Ariba’s capabilities within traditional SAP accounts. | |
Privately held by founders |
| Pioneering founder Harve Light is still active in the company. Son Scott has assumed the company helm to enable growth. | |
Founders | Pricing | Started in 2012 by veterans of firms like Revionics, JDA, Khimetrics and other high tech companies. | |
Dassault Systèmes/ Apriso | Public: symbol DASTY |
| Though not considered strictly a supply chain provider, Dassault has made a push into manufacturing over the last few years with the acquisition of Apriso and now, Quintiq, both of which are part of its DELMIA/3D division. Read more in this issue about Dassault’s recent acquisitions. |
Public: symbol DSGX |
| The leader in transportation systems, Descartes continues with organic growth from innovative developments as well as acquisitions. Read about Gorilla in the transportation software market. | |
Privately held by founders |
| Manugistics alums Paul Strzelec and Dirk Liebich founded the company, providing a unique managed service approach to understand demand patterns and improve forecast accuracy. | |
Public: symbol EOPN | Demand and Supply Network | Recent public offering of this firm that started during the internet boom. e2open’s initial focus was in the high-tech markets, but now includes industrial and consumer product companies. | |
Founders + | Pricing and analytics | First Insight uses a gamification approach to determine products and initial ticket pricing. Building on that success, they have expanded their solution to look across the product lifecycle to manage pricing and merchandise planning. http://www.crowdsourcing.org/document/the-black-ops-of-retail/13789 | |
| Though taking the name GT Nexus, this was a marriage of equals: Tradecard and GT Nexus. This powerful combination in global supply chain has some unique attributes fusing the physical and financial supply chains. Recent GT Nexus discussion here. | ||
Recently taken private by RedPrairie’s PE, New Mountain Capital |
| JDA’s path to the largest player in supply chain was through acquisition (Manugistics, i2, and others) and IPO. RedPrairie had several incarnations, but fundamentally was a WMS/fulfillment company. After New Mountain acquired RedPrairie, the next move, which many in the market often talked about, was marrying Planning and Execution; thus, New Mountain’s acquisition of JDA. This marriage is having its challenges, but fundamentals are excellent for some interesting moves in the future. | |
Founders and employees |
| To date, organically grown JustEnough is developing solutions such as Merchandise Planning and Replenishment for retailers, Demand Management for brand/CPG companies, and Social Media Marketing analytics. | |
| HighJump was founded in the 90s by Chris Heim. It was acquired by 3M and then Battery Ventures, which also then acquired TrueCommerce. | ||
Founders/employees, |
| Founder Diego Pantoja-Navajas has taken a conservative approach toward investors, preferring to ensure a foundation and value before seeking outside funding. LogFire can boast a prime position as the leader in cloud WMS today. | |
Public: symbol LGTY | Demand and Supply Suite | Logility spans the demand side. Customers are both consumer and B2B manufacturing. With the recent acquisition of MID Retail, which adds MFP functionality, their scope now extends into retailer merchandising. | |
Privately held by founders | TMS | Founders Monica Wooden and Steve Blough have self-funded the growth of MercuryGate. The market has responded to their approach, creating one of the fastest growing supply chain players out there right now. | |
| Networking demand/supply and collaborative processes between suppliers and their retail customers. | ||
Privately held by founders and key employees | Demand and Supply Network | The goal of ONE, when they launched, was to create a network that had planning and execution, a novel concept at a time when the market segmented these. ONE has purchased several other supply chain packages such as Elogex, Valdero, Egnyte, and others. | |
Founders and key employees + |
| Initially founded as Vision Chain by a team with years of solving consumer supply chain and analytics problems, the company is experiencing a surge in growth due to its unique approach to solving planning and inventory problems not addressed by other solutions. | |
Public: symbol PTC |
| Long known in PLM, with the acquisition of Servigistics PTC established themselves as a leader in the Service Lifecycle Management | |
Founders + |
| Founders hail from Retek and other retail software firms. SaaS-based and on-demand, still unusual for the planning market, Predictix is an international software firm that enables a more collaborative approach to planning between suppliers and retailers — unified planning. | |
Founder Bindiya Vakil + | Supply Chain Risk | Founder Bindiya Vakil worked in supply chain in high tech and saw a better way to do supply chain planning. Resilinc has demonstrated resiliency, not only to survive in a challenging market, but provide resiliency to their worldwide customers who deal with risk on a daily basis. | |
| Ah the incarnations of Savi! This company has been bought and sold a few times, but retains key customers. Recent spinout of Lockheed allows Savi to discover new markets outside Defense such as the IoT. | ||
Founders + | Sales and Operations Planning | Founders believed that the spreadsheet would be here to stay. But over the years, Steelwedge has kept their edge by continuing to innovate. Tackling S&OP seemed a long shot in the beginning, but was a smart move since today S&OP is one of the top drivers of SC software purchases. | |
Customer Insights, Fulfillment | Aldata, well know for WMS/Fulfillment, was acquired by Symphony. Seizing the growth of retail, Omni channel, and various fulfillment models such as click and collect, Symphony acquired other software companies such as EYC. This added customer analytics, so demand can drive the fulfillment strategy. | ||
| The power behind the throne, TransVoyant’s Continuous Decision Platform™ helps companies (and software partners who use TransVoyant as part of the visibility platform) to provide precision and context. TransVoyant has parlayed their scalability from major government solutions into a world-wide supply chain solution with the recent creation of a commercial division lead by alums from i2 and GT Nexus. | ||
TAKE Solutions Ltd |
| Key shareholders are Indian founders whose major holding outside of the US focuses on consulting and integration services. In the US, TAKE has two divisions. In New Jersey, TAKE focuses on healthcare with an international customer base of big Pharma. The Austin Headquarters focuses their efforts on supply chain, with a recent launch of a SaaS-based direct procurement solution. | |
Founder Robert Byrne + early round investors | Demand Sensing/Near-term Forecasting | Innovator in near-term/demand sensing SaaS solution, now imitated by others, Terra has a strong presence in major CPG brand companies. Pioneering SaaS demand sensing solution was the brainchild of Byrne, whose career included Numetrix and JD Edwards. | |
Privately held by founders + |
| Beyond tools, the company offers deep demand analytics and is an innovator in machine learning which helps planners to sift through mountains of data and learn from past market events. | |
Privately held by | Supply Chain Network | Initially founded as Sockeye Solutions, winning the HP supply-base network. Kall assumed ownership a few years back and has invested significantly in transforming the product to scale and support other industry verticals. | |
Privately held by founders | Pricing Optimization | Founders hail from i2 alum (Sandy Tungare, Usha Iyer, MG Gupta) who wanted to tackle the challenge of pricing — not just at the point of purchase, but throughout the lifecycle of pricing: from concept, during the product design and introduction, through end-of-life. Most pricing applications focus on retail, so Vistaar also has an industrial side/B2B that allows for analytics of account/customer value. | |
Founders + | TMS | Another transportation technology company started by serial entrepreneur Mitch Weseley . Organically grown through development plus merger with Transite. 3gtms has hired a team of vets from across the transportation technology industry to power their growth. |
Figure 1 is not designed to position providers and functionality. In New Dimensions in Demand Management, we provide an overview of many of the providers and their focus areas. In Transportation Systems Redefined, we hope you will widen your perspective on what the TMS/Transportation market is today. These markets are developing broader solutions to include social, location-based, mobile, new analytics, broader definitions of ‘who the customer is’ and so on. Thus, not only is there plenty of development, but new companies are popping up to solve some of the problems that may have been too hard to solve before. By using the web, social networking and search, as well as building on decades of knowledge, enterprises can delve into these more difficult problems.
We are not placing any value judgments on the benefits or drawbacks of outside investments, either. In general, the supply chain market has attracted growth players who see innovation and expansion into new territory — functionality, industry requirements, new tools — as a good thing.
More investment stories are bound to emerge over the next few months, since a healthy end-user market means a healthy investor market in today’s hyperactive supply chain market.
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1 More on this in Who Owns the ERP Market? — Return to article text above
2 http://en.wikipedia.org/wiki/Other_People’s_Money — Return to article text above
3 http://en.wikipedia.org/wiki/The_Company_Men — Return to article text above
To view other articles from this issue of the brief, click here.