The two companies, which are both tackling financial troubles and management shuffles, signed a letter of intent last August to set up a new organization, called Baan-JDA Retail. The organization would have tied Netherlands-based Baan's business applications to JDA's software for retailers.
Though the venture is scuttled, Phoenix-based JDA said the company still intends to work on a deal-by-deal basis with Baan, which is jockeying to compete for new business in the $3 billion retail software sales market with rivals SAP and PeopleSoft.
SAP and Oracle have already developed several versions of their systems for various retailers and PeopleSoft bought its long-time partner Intrepid Systems, which competes with JDA.
Analysts said Baan probably nixed the legal deal to focus on its ongoing restructuring.
"Baan has had a tough couple of quarters," said David Caruso, an analyst at AMR Research in Boston."Our call on this is that it makes sense for Baan to pull the plug on this business deal and really concentrate on their core business."
"Baan had all these irons in the fire at one point and it was clearly causing them to lose focus on their main focus: the manufacturing industry," said Dennis Byron, analyst at International Data Corporation in Framingham, Massachusetts. "If you're trying to centralize and get more focused you don't want all these separate entities and separate cost structures spun all over the world."
Despite a recent infusion of $75 million in equity investment from Fletcher International, Baan is still reeling from losing $32 million in the third quarter of 1998 and the layoff of 20 percent of its workforce.
JDA is also feeling a financial pinch. The company this week warned of a $2.5 million expected fourth-quarter shortfall, pointing to disappointing software license sales in the company's European, Latin American, Asian, and North American markets. JDA will announce its results January 28.
The company also announced that CEO Brent W. Lippman has resigned and will be replaced by James Armstrong and Frederick Pakis, the company's cofounders and cochairmen of the board, who will return to run the company together as co-CEOs.