Last month, E2open, a supply chain network company, acquired icon-scm, a network planning and response management provider. IDC Manufacturing insights was particularly interested in the announcement as it relates to manufacturers who are investing in supply chain planning and collaboration efforts to better optimize the massive multidimensionality of today's global supply chains, one of our 2013 Supply Chain Predictions.
On July 30, E2open announced that it has acquired Germany-based icon-scm, in a transaction valued at approximately $34 million in total consideration. icon-scm's disclosed revenue for 2012 was approximately $10 million. Notable customers for icon-SCM are concentrated in the high tech/electronics segment and include Foxconn and Hewlett Packard.
E2open has built a cloud-based on-demand trading partner network, known as E2open Business Network, which supports over 36,000 trading partners in their efforts to procure, manufacture, sell and distribute products more efficiently and effectively in today's massively multidimensional global supply chain. IDC Manufacturing Insights sees this as a primary focus for companies in 2013 and beyond.
E2open seeks to enable the visibility of and control over trading partner activity for manufacturers across the complex supply network. Part of the company's long-term vision is the creation of "supply chain control towers," that are designed to capture live raw data feeds and translate them into actionable information and analytics for trading partners. These control towers require trading partner connectivity, multi-tier network management, network planning and response, and cross-network analytics with real-time visibility.
E2open has spent the past 12 years building out trading partner connectivity and it has added cross-network analytics and some network planning and response capabilities. With the icon-scm products, E2open will be able to extend its reach further into network planning and response, complementing its recently released Rapid Resolutions Supply Demand Workbench.
The acquisition will eventually terminate icon-scm's Solution Extension (SOLEX) Partnership with SAP. SAP has stated its intent to terminate this agreement and the timing and terms are currently being negotiated. The SOLEX partnership had placed icon-scm's product on the SAP official pricelist (sold as SAP Supply Chain Response Management by ICON-SCM) and led to several significant customer wins for icon-scm. Post-announcement, SAP continues to maintain the importance of response management as a critical component of supply chain collaboration and business networks, and is continuing its internal innovation cycles in this space.
As for manufacturing companies in general, this acquisition highlights the continued melding of supply chain planning and execution and trading partner networks to support the increased complexity of the global supply chain. The ultimate goal of integrating planning with real-time execution is becoming more focused, and it will be an important capability consideration for companies that are in the process of applying some of these "smarter" technologies to the modern supply chain. For further analysis, IDC Manufacturing Insights' Supply Chain Strategies clients can access the full report, Perspective: E2open Acquires icon-scm ( Doc# MI242819) about the E2Open acquisition of icon-scm here.