Thursday, September 27, 2007
Pro-sellout shareholder of i2 elects second board member
Amalgamated Gadget, a major shareholder of i2, has now elected its second board member, one David L. Pope. According to the SEC filing, Pope is employed by an affiliate of Amalgamated, which "acts as investment manager for R2 Top Hat, Ltd., which owns all of the issued and outstanding shares of the Series B Preferred Stock." Earlier this month, Amalgamated openly called for i2 to find a buyer
An astute reader also informs me that i2 has taken down from its website all open job postings for customer-facing positions. He notes that previously, i2 had consistently been running 30-50 of these jobs at any one time. It's all speculations, but it could be an indication that the company is trying to reduce costs by not filling open positions, possibly to improve earnings prior to negotiation with potential buyers.Update, Oct. 4:
A second major shareholder, SAC Capital Advisors LLC, has just increased its holdings of i2 shares to 8.9% and promptly joined the call for sale of the company. At the same time, i2 is reporting that it has narrowed the list of finalists in its search for a new CEO and expects to name the winner in 30-45 days. If so, the winner may find him/herself with a very short resume entry.Update, Oct. 15:
The job postings now appear to be back online on i2's website. There are 51 jobs currently open, a level similar to that in the recent past. So, maybe the absence of postings was due to a website glitch.Update, Oct. 17:
Barrons is reporting that another major shareholder, SAC Capital, now holds 1.9 million shares (8.9%) of i2 and is also calling for sale of the company.Related postsMajor i2 shareholder calls for sale of i2
Friday, September 21, 2007
Oracle reports another blow-out quarter
By my count, it's now three quarters that Oracle has reported financial results that exceeded expectations. The first time (Oracle's last year Q3), I questioned
whether Oracle had achieved those results by draining its pipeline for Q4.
But then Oracle's blow-out results in Q4 ruined my theory. But I noted
that Oracle co-President Safra Catz was predicting a whopping 20-30% increase in new license sales for Q1.
So what is Oracle reporting now for Q1
? A 35% increase in new license sales, including a 65% increase in Oracle's application software revenue. Some other results: a 26% increase in revenue and a 25% improvement in net income. All of these results exceed just about anyone's expectations.
So what's going on? Certainly, a strong technology market doesn't hurt. Evidence of that is SAP's strong performance last quarter
(it has yet to report the most recent quarter). Many other technology providers are showing strong results as well. Furthermore, I'm seeing and hearing of many new deals in process for enterprise software vendors generally, more so than in years.
But it's impossible to ignore the fact that Oracle's results also speak to the success of its acquisition strategy. Oracle keeps acquiring and integrating smaller vendors each quarter. This quarter's results include revenues from its pick up of Hyperion and Agile Software. Whether or not you like the trend toward vendor consolidation, of which Oracle is a major driver, it's hard to argue with success. We'll have to wait another three months to see if it can continue its hitting streak.
In the meantime, I am giving up on trying to predict Oracle's performance.Related postsSAP sales jump, defying Oracle's PR campaignOracle's Q4 beats estimatesDid Oracle just drain its pipeline?
Thursday, September 20, 2007
IT budgeting policies and practices
Over at Computer Economics, we've launched a new survey on IT budgeting policies and practices. The survey covers the following areas:
- What categories of spending are typically included or excluded from IT budgets
- Where such spending appears: corporate IT budgets, divisional IT budgets, or user departmental budgets
- What types of IT expenses are charged back to users
- The trend for IT spending this year and next year
The survey will only take 10-15 minutes. If you or someone you know is interested in this subject, you can take the survey at the following link.
Anyone who completes the survey will receive a free copy of our analysis report that we produce from the survey results.
Friday, September 14, 2007
Major i2 shareholder calls for sale of i2
i2 has been having some tough times lately. CEO Mike McGrath resigned in July. Then the firm announced an earnings shortfall for its second quarter. It also said that it wouldn't be able to meet its previous forecast for the full year.
Now, one of i2's largest shareholders is calling for i2 to throw in the towel
and search for a buyer. In an SEC filing yesterday, Amalgamated Gadget LP, said that i2 is too small to survive as an independent company and is better off to seek to be acquired.
Amalgamated isn't just blowing smoke. The size of its stake in i2 gives it the right to elect two board members. It says that it has already elected Michael Simmons, formerly from General Electric, as a board member and it is now seeking someone to fill its second open position.
i2 has been trying to recover for years from the tech downturn earlier this decade, but never fully seems to be able to get traction. Most recently, it has been trying to juice up its business model by adding more services to its traditional software product mix. This strategy, to me, has a lot of attraction in that supply chain management projects are often highly customized to the specific industry and supply chain than pure off-the-shelf solutions.
Nevertheless, an acquisition is probably the best path right now for i2, to put it in the hands of a larger firm that can better leverage its extensive product line, its impressive client list, and its patent portfolio.
The question is, who will step up to this opportunity? Names like Oracle and Infor are often mentioned, since they already have a history of making such acquisitions. But I think that some of the large IT services firms, both in the U.S. and in India, might be potential buyers. Think CSC, Accenture, IBM Global Services, or Infosys. I'm just speculating here, but since, as mentioned earlier, i2's business is increasingly services-oriented, such a combination might make a lot of sense.Related postsi2 seeks patent license shake-down feesFormer i2 CEO learns crime does not payi2 innovates with hosted vendor-managed inventory servicesSAP: If you can't beat 'em, sue 'emi2 kills off its SRM businessi2 fires 300, struggles to refocus
(c) 2002-2015, Frank Scavo.
Independent analysis of issues and trends in enterprise applications software and the strengths, weaknesses, advantages, and disadvantages of the vendors that provide them.
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