i2’s revenue has continued its decline.
i2’s revenue fell on both a sequential and a yearly basis in Q1 2004. For the latest period, i2 reported revenue of $83.6 million, down from $97.7 million last quarter and $157.9 million a year ago.
License revenue followed a similar pattern, coming in at just $12.4 million compared to $14.8 million in Q4 2003 and $19.1 million in the equivalent quarter last year. However, the supply chain management company did reduce its net loss to $30 million compared to a loss of $49 million last quarter, and a net profit of $41.3 million in the first quarter 2003.
i2 has not been idle in trying to find a resolution to its problems. Its latest strategic initiative is to take advantage of the move to services-oriented architecture and cross-function business processes through its Supply Chain Operating Services process integration and management platform. The company describes SCOS as a software infrastructure designed to enable the efficient operation of supply chains by using web services and other open standards to bring together disparate applications.
The aim is to enable cross-function business processes. However, i2 maintains that it goes beyond integration functionality because workflow, data synchronization and business intelligence are all embedded into the platform.
In this sense, it is making a similar pitch to SAP [SAP] with NetWeaver, and that is part of its underlying problem. When faced with the prospect of buying a highly strategic piece of technology, customers are reluctant to go with i2, particularly when there is the prospect of opting for similar offerings from larger, broader-based, more financially stable vendors like SAP, PeopleSoft, and Oracle, which are also relentlessly cutting into its market.
The nub of the problem is that i2 is caught in a downward credibility spiral, and no matter how it twists, it has been unable to extricate itself. With $259 million in cash and a respectable customer base, its best chance would come through being acquired.
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This article is based on material originally published by ComputerWire
