Is Manugistics' success I2's downfall?

A few weeks ago, i wrote that supply chain management was cooked (www.eWEEK.com/links). I said that since maximum efficiencies have been reached at the companies most interested in the technology, there's not a lot of growth left. n Several people wrote thesis-quality rebuttals, which for the most part didn't offer much evidence to prove me wrong, although the verbiage would have made their college professors proud.

Still, no one's been able to make me second-guess myself. Until now.

There's a huge, untouched market for supply chain management. It's called the midmarket, and it's in the sights of Manugistics Group, a company that just a year and a half ago was left for dead.

Before I get to the midmarket, it's interesting to point out how Manugistics recovered. Greg Owens, the company's CEO, said that when he came on board a year and half ago, he saw a company that was very technical with great products but no marketing skills. So he canned the executive staff and replaced it with people who knew how to market themselves.

The turnaround was stunning, proving that a total focus on technology is meaningless unless you know how to explain to your customers what you do. In Manugistics' case, this is especially true because its main customer base was the nontechnical retail and transportation markets. Tech-savvy or not, Manugistics won some outstanding deals.

Meanwhile, Manugistics' main competitor, I2, is mowing down the high-end market, striking up massive deals and overpaying out the wazoo for Aspect Development.

If I2 doesn't play its cards right, however, it may hit a slump. Yes, industry darling I2, which was one of the first companies I editorialized about almost three years ago (www.eWEEK.com/links), could hit the skids. My reasoning is simple. I2's M.O. is to drive technology to the highest-end customers it can, hoping that the trickle-down theory works better for supply chains than it did for economics.

I2, however, is a highly technical company. With the huge need for building trading marketplaces on the high end, I2 should have an amazing run for the next year. But there's also a lot of consolidation going on, meaning fewer customers.

I'd say the midmarket is the safer harbor, simply because there are a lot more companies there. ´

yes, industry darling i2 could hit the skids. my reasoning is simple.

Is the high end drying up? Write me at john_taschek@ziffdavis.com.