By William Fellows and Siobhan Kennedy
JD Edwards is expected to use next week’s user conference in Denver, Colorado to announce two new OEM relationships, bringing integrated front office, customer relationship management and procurement applications to its OneWorld ERP suite for the first time. Other speculation suggests that the company, which is sitting on a $200m cash pile, is on the verge of making its second acquisition since its 1997 IPO. The company mentioned most is Toronto-based retail supply chain company, Numetrix Inc, though rumors could not be confirmed and JD Edwards did not return calls. Numetrix didn’t return calls either. But after picking up Premisys Inc for $12m earlier this year, JD Edwards seems to have acquired a taste for acquisitions. In its SEC filings the middle market ERP company has consistently said it would use money raised in its public offering for acquisitions.
Although it doesn’t compete directly with SAP, PeopleSoft and Baan, JD Edwards is looking to build out its OneWorld suite with services similar to those offered by the higher-end players and to move beyond its reliance on revenue from sales to AS/400 users. At the same time it doesn’t want to repeat the mistakes Baan and PeopleSoft have made by biting off more than they could chew with multiple acquisitions.
Numetrix says its Collaborative Enterprise Network can connect a manufacturer’s supply chain with its suppliers, customers, partners, retailers, and distributors. The company specializes in developing systems for the food, pharmaceuticals, chemical and consumer goods industries, markets which JD Edwards doesn’t currently offer supply-chain solutions for. It does have one partnership in the supply chain sector, with SynQuest Inc, but only to offer solutions for discreet markets, such as the production of electronics parts for the PCs and so on. Thus, an acquisition of Numetrix would allow the ERP vendor to broaden its offerings into more mainstream markets where it would compete with the likes of leading vendors, i2 and Manugistics.
At least one analyst we spoke to confirmed that he thought the acquisition was on the cards, having attended a meeting with JD Edwards last week in which Numetrix was due to speak, but didn’t for unknown reasons. He also said that i2, one of Numetrix’s main rivals, is also rumored to be making an acquisition any day now.
Separately, the reseller agreements will be a departure from JD Edward’s usual strategy. Typically, the ERP vendor has favored internal development, so as to ensure tight integration with its existing software. However, given the growth of the front office applications market, and the sluggish demand for ERP products, the company now seems ready to abandon that strategy and use its distribution muscle to sell third party products. Wall Street brokerage Credit Suisse First Boston expects the agreements will have a material impact on revenues, but it declined to make any stock predictions given the intermediate-term health of the ERP market.
