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i2 delaying software to work out kinks

The software maker says its decision is based on a "hard-core focus on customers right now." After taking hits in the past, has the company learned its lesson?

After bad press and disgruntled customers took their toll on i2 Technologies' image and bottom line, the software maker is exercising some patience.

i2 said Thursday that it would postpone by six months the next major release of its manufacturing planning software, version 6.0, to ensure its products are free of bugs and glitches. The company had planned to release the software over the summer and is now aiming for the end of the year.

"The main reason behind the decision is just being consistent with i2's hard-core focus on customers right now and making sure everything is as perfect as it can be for customer satisfaction," an i2 representative said.

The company does plan to release an interim upgrade of its application this summer.

Several disaffected i2 customers have publicized their problems getting the company's applications to work. Last year, Nike accused i2's software of bungling its shoe manufacturing operations. i2 shares tumbled after Nike said it would miss its third-quarter earnings targets and partially blamed the software maker.

This year, German industrial manufacturer Siemens said an i2 application it had purchased performed inadequately. After i2 missed the deadline for fixing the problem, Siemens built its own application.

The decision to delay the product release came from i2's new management. i2 Chairman Sanjiv Sidhu replaced Greg Brady, who resigned as chief executive amid a warning of sharply lower sales. Sidhu said recently that a big part of getting i2 back on track would be by focusing on customer service.

"A major restructuring caused i2 to be internally focused," said Sidhu, speaking last month via teleconference about the company's first-quarter earnings. "I need to make us more externally focused on competitors and customers and go back to creating value for customers."

i2's decision to iron out the bugs before releasing its software is "a marked change in approach from the previously more aggressive release schedule," AMR Research analyst Beth Barling said.

But i2 isn't the only software company that has been accused of rushing products to market to gain a perceived lead on the competition.

Database software giant Oracle angered customers when it released a version of its business applications in 2000 that had bugs. Last month, Oracle Chief Executive Larry Ellison pledged improved service to hundreds of customers gathered at an Oracle conference.