Search By Topic The Green Supply Chain Distribution Digest
Supply Chain Digest Logo

Category: Supply Chain Trends and Issues

Supply Chain News: E2open Makes another Complementary Acquisition (Zyme), as Company Quickly becoming One of Largest Best of Breed Supply Chain Software Providers

 

E2open Approaching $200 Million in Revenue, as Acquisitions and Organic Growth Fuel Top and Bottom Lines

Nov. 7, 2017
SCDigest Editorial Staff

Supply chain software provider E2open announced another acquisition this week with the purchase of a company called Zyme, which provides largely technology firms with information on inventories and more from integration of downstream channel partners

It comes as the latest in a series of acquisitions under CEO Michael Farlekas, who took on that role in 2015. But unlike some software companies employing "roll up" strategies – acquiring smaller supply chain software companies just to get additional customers and revenue and take out a lot of the costs from the acquired firms - E2open's moves have been more strategic, providing complementary capabilities to its existing solution suite and strategy.


Supply Chain Digest Says...

A combination of these acquisitions and solid organic growth means 2017 revenues are now expected to be in the $170 million dollar range.


What do you say?

Click here to send us your comments
Click here to see reader feedback

As a result, E2open has somewhat quietly become one of the largest "best of breed" (meaning not an ERP) supply chain software companies in the market.

E2open has its roots in the old TradeMatrix solution set initially developed by i2 Technologies in the late 1990s, before operational, financial and at the time market challenges led i2 to abandon the solutions, which in effect involved creating a series of electronic marketplaces for different industry sectors.

Most of these marketplaces simply went away, but the one for the high tech industry, always by far i2's strongest sector, made it as an independent company, providing multi-level visibility to upstream suppliers to manage commitments, manufacturing plans and more.

As such, E2open provided a unique visibility and collaboration solution that allowed the OEMs, such as Dell and HP, to really see their supply chains across tiers operating in real time. It would take more space than I have here to fully describe these capabilities, but if an OEM say has an opportunity for 10,00 new units, it can see if it has the supply commitments needed to make the customer order promise, and then see if those commitments are achieved on-time during execution.

Enjoying strong top line growth, E2open went public in 2012. However, it did not well control spending and saw losses mount, sending the stock price tumbling just a couple of year later. It was acquired and taken private by private equity firm Insight Venture Partners in 2015.

Under Farlekas, costs were quickly brought back in line with sales, which are pretty predictable given much of the company's revenues come from a SaaS/subscription model rather than upfront license fees, as was the traditional model in supply chain software.

Before Farlekas took over the helm, E2open acquired a company called ICON-SCM, which provides a unique supply chain planning system around effectively and dynamically pegging inventory to orders.
After Farlekas' entry and the quick righting of the financial ship, E2open acquired "demand sensing" and inventory optimization vendor Terra Technology, which boasts customers such as Procter & Gamble and Unilever, and then Orchestro, which provides a "demand signal repository" across retailers so manufacturers can better see actual demand. Both solutions target consumer goods companies.

These two acquisitions go very well together, with the Orchestro solution now providing the POS data - the key potential bottleneck - to the Terra solution.

 

(See More Below)

CATEGORY SPONSOR: SOFTEON

Learn More about Softeon's Innovative Supply Chain Solutions

 

E2open hopes that the Terra solutions especially can be attractive to other segments outside consumer packaged goods sector.

Then in early 2017, E2open acquired Steelwedge, a provider of demand planning and S&OP solutions, largely focused on high tech and other discrete manufacturers.

 

Now comes this Zyme acquisition, somewhat larger (revenues about $40 million) than previous deals, which involved companies in the $10-20 million range.


Zyme can be viewed as highly complementary to E2open's existing solutions. First, it provides demand information in the tech sector somewhat analogous to what Orchestro does with retail demand in consumer goods, supporting the Steelwedge solutions.


More directly, Zyme's multi-channel demand and inventory capabilities for downstream channels is a mirror image of what E2open has been doing on the upstream supply chain since its inception. This provides high tech – and perhaps someday other sectors – real end-to-end visibility from supply through demand.


Earlier in the year, E2open announced its Harmony platform, a system to bring all these different solutions together without a series of direct integrations, and providing over time a common user interface across all the systems.


A combination of these acquisitions and solid organic growth means 2017 revenues are now expected to be in the $170 million dollar range, and some $185 million next year, of which an impressive $100 million or so will come from SaaS/subscriptions.


It is solidly profitable.


You can expect more acquisitions soon from a company that is clearly on the move.


 

Any reactions to E2open's moves?  Let us know your thoughts at the Feedback section below.

 

 

Your Comments/Feedback

 

Features

Resources

Follow Us

Supply Chain Digest news is available via RSS
RSS facebook twitter youtube
bloglines my yahoo
news gator

Newsletter

Subscribe to our insightful weekly newsletter. Get immediate access to premium contents. Its's easy and free
Enter your email below to subscribe:
submit
Join the thousands of supply chain, logistics, technology and marketing professionals who rely on Supply Chain Digest for the best in insight, news, tools, opinion, education and solution.
 
Home | Subscribe | Advertise | Contact Us | Sitemap | Privacy Policy
© Supply Chain Digest 2006-2013 - All rights reserved
.