Sure enough, late last month SAP announced its acquisition of Khimetrics, one of the other key vendors generally lumped together with ProfitLogic. The area of pricing, profit, and demand optimization is highly fragmented, with various players focusing on different aspects of the problem, in different industries. For example, ProfitLogic has strength in specialty goods and apparel, whereas Khimetrics has special expertise in grocery and general merchandise and has recently been pushing into financial services.
DemandTec, Manugistics, Spotlight, Connect3, and Vendavo are other vendors offering solutions in this space. Expect further consolidation as Oracle and SAP look to fill out their offerings in this area.
Update, 7:00 p.m. Read Jason Wood's comment on this post, which raises some insightful questions on this deal and why SAP didn't choose DemandTec over Khimetrics. Also, on his own blog, he writes,
Khimetrics is, by most accounts, a fine company [it's my understanding they are running at approximately $30mm annually and growing], but as an investor I have to wonder what this means for DemandTec? DemandTec has been SAP's partner in demand-driven price optimization and its solutions are already integrated into NetWeaver [unlike KhiDEMAND]. Furthermore, DemandTec is considered the market leader both in terms of revenue market share and technology footprint. So what led to SAP acquiring Khimetrics instead? Was DemandTec unwilling to sell? Was their asking price too high? Were there issues with the partnership that are beyond our purview?I'm thinking maybe the story isn't over yet.
Related posts
Oracle beefs up retail offerings with ProfitLogic bid
SAP walks away from Retek deal
Manugistics V7 seeks to deliver profit optimization in small bites
2 comments:
Frank,
Frankly I was underwhelmed by the Khimetrics purchase on several levels. One, SAP had a partnership with DemandTec already and they are, from what I understand, more established at this juncture. Two, Vendavo is a key SAP partner and one that Bill McDermott singled out at the SAP analyst day. Why Khimetrics? No prior relationship, not the market leader [in a fragmented sector], and no clear technology advantage over existing partners.
I blogged about this a few weeks ago in case you're interested...
http://woodrow.typepad.com/the_ponderings_of_woodrow/2005/11/sap_acquires_kh.html
actually, SAP and Khimetrics have had a long working relationship together, just like Vendavo and Demandtec, and they are integrated with NetWeaver as well.
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