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IBM, i2 ink supply chain pact

Continuing its push into the supply chain management space, IBM forms a partnership with i2 Technologies, a supply chain software maker.

Continuing its push into the supply chain management space, IBM today formed a partnership with i2 Technologies, a supply chain software maker.

Under the deal, IBM and i2 said they plan to collaborate on the strategy, marketing, sales, and development of supply chain software and products along with e-business tools.

IBM said the agreement includes the direct selling of i2's Rhythm suite, the firm's supply chain planning and management tools through IBM's global direct sales team, in which i2 will benefit from IBM's resources and research facilities. In addition, White Plains, New York-based IBM said it will establish global supply chain centers of excellence featuring the combined offerings.

In turn, i2 said it will incorporate the standards and technologies of IBM's Application Framework for e-business, an open, multiplatform approach to building and deploying integrated e-business applications. From this, IBM and i2 will support the development of industry standards to help facilitate the multivendor collaboration necessary to improve supply chains, the two companies said in a statement.

Together, both companies said they will help customers optimize their e-business processes on the Internet by offering supply chain applications, consulting, technology, advanced research capabilities, and implementation and integration skills on a global basis as a part of IBM's Supply Chain Management offerings.

Last year, IBM began licensing i2's Rhythm suite, which at the time, was a blow to SAP's supply chain management initiative. As reported, IBM, which was one of SAP's largest customers, didn't hold off plans to move into the supply chain arena while SAP's newly released product matured. Most of the larger firms weren't going to hold off on their move into the fast growing supply chain software market, which was predicted to grow to a $2.7 billion market by 2001, analysts said at that time.

Since then, SAP had experienced some delays related to its New Dimension software product line, which included supply chain and front office software. The business software maker has been banking on the new software line to help it tap new markets and reduce reliance on the company's flagship R/3 product, which automates accounting and other internal business functions, as reported earlier by Bloomberg.

In today's deal, both companies said that U.S.-based manufacturer Delta Faucet and Carraro Group, a Italy-based automotive and industrial components manufacturer, are among their first customers.

The ongoing relationship is expected to bring out "significant opportunities" for both IBM and i2 in the supply chain market space, said an IBM spokesman.