Supply chain management B2B network provider E2open announced today yet another acquisition, signing a definitive agreement to acquire Zyme, a provider of Channel Data Management (CDM) software. No terms were disclosed and the acquisition, subject to customary regulatory approvals, is expected to close in the coming weeks.
Zyme, with $40 million in total revenues, is a Cloud platform designed to provide critical downstream visibility and management control for global companies that leverage distributors, retailers, online providers, and resellers to sell their products. The technology suite includes a Channel Data Management as well as Channel Performance Optimizer software offering. Its platform includes the presence of 15,000 distributors, the majority of which reside outside the United States and supports upwards of 1.5 billion channel related transactions per year.
Zyme has primarily made its market presence in directly supporting sales and marketing teams in their need for optimizing overall trade spend. Support is provided in indirect channel visibility, inventory, and process management such as trade promotion management and rebate control. This added acquisition can now provide E2open the added benefit of augmenting supply chain as well as sales and marketing focused demand visibility and management across indirect channels.
The two co-founders of Zyme previously held management roles at former supply chain planning technology provider i2 Technologies.
Zyme’s industry concentration has been in consumer product goods, high-tech electronics, industrial, pharmaceutical and drug verticals. Existing customer names include Amazon, Dell, Fujitsu, GE, Microsoft, Plantronics, Seagate, Schneider Electric, Symantec, VMware, and Xerox, among others, with some overlap to existing E2open customers. Existing pre-built integrations are directed at Salesforce and Microsoft Dynamics Cloud platforms but that will likely change with now being a part of E2open’s platform.
Readers may recall that E2open itself was acquired and taken private by Insight Venture Partners in February of 2015 for a reported sum of $273 million after struggling to achieve expected profitability goals. The B2B platform provider then initiated a series of cost reduction initiatives which included moving corporate headquarters from Silicon Valley to Austin Texas.
Since that time, the company and its private-equity partners have initiated a flurry of subsequent acquisitions designed to augment its overall platform capabilities and extend total revenues with a stated goal of universal cloud connectivity of the extended supply chain supported by a broad offering of applications. Prior acquisitions included data intelligence provider Terra Technology in March 2016 and Cloud-based demand signal depository provider Orchestro in June 2016.
In February, the platform provider announced a merger with supply chain planning and S&OP process support software provider Steelwedge, with the stated goal of adding deeper supply chain and sales and operations planning decision support capabilities to its platform. The technology provider just recently announced the full integration of Steelwedge S&OP as part of its 17.4 product cloud release at the end of October.
Company executives indicated to Supply Chain Matters that the technology provider is currently on-track to meet a $178 million total revenue goal for its fiscal year ending in February 2018, not counting the incremental revenues of Zyme.
Interesting enough, E2open’s parent Insight Venture Partners acquired Zyme in April of this year in a reported $100 million-dollar deal to buy out existing investors and shareholders. Prior to this action, Zyme had been operating from a Series B investment from May of 2014.
E2open CEO Michael Farlekas often reiterates that scale matters in a B2B Business Network platform in relation to total users, countries supported and volumes of transactions and item categories that are being supported. That is indeed the strategy that continues to unfold from private-equity owners Insight who have been exercising exit strategies for up and coming supply chain technology providers via additions to the E2open network.
The acquisition of Zyme provides yet another fill-in in E2open’s overall strategy in providing end-to-end supply chain planning and decision support visibility across its platform. More interesting however, is the potential for the S&OP team to gain earlier visibility to product demand via social media sensing, and to augment such visibility with important information related to trade promotion performance couple with channel inventories. That will help to avoid “noise” created in product demand signals and potentially provide smarter inventory response from the supply chain. Zyme further provides E2open with artificial intelligence based capabilities in demand sensing and management, which company executives now indicate will be further explored or leveraged in other existing E2open platform support capabilities.
Supply Chain Matters has opined previously that adding S&OP support capabilities to a B2B Business Network platform provides the process a far broader external end-to-end context to information across the different strategic, tactical, and operational phases of S&OP decision-making. The addition of Zyme can achieve two further objectives- satisfy decision needs for sales and marketing team participants while providing operational team members with a more-detailed information context as to direct and indirect channel fulfillment information related to individual products. Taken together, in the need for online digital transformation and greater levels of online customer fulfillment, and the unfolding strategy appears to be rather timely. The addition of Amazon as a Zyme and subsequently an E2open customer adds even more perspectives.
© Copyright 2017. The Ferrari Consulting and Research Group and the Supply Chain Matters® blog. All rights reserved.