It appears that size does matter—at least in the software industry. The supply chain sector of the software business has recently witnessed a flurry of acquisitions among companies anxious to boost their presence and scope. First, JDA Software purchased Manugistics. Just weeks later, Infor gobbled up its largest rival, SSA Global. And in mid- May, Sterling Commerce announced that it was acquiring Nistevo, a company specializing in on-demand transportation management solutions.
JDA announced that it had acquired Manugistics, a company that makes supply chain management software, for $211 million in late April. Through the acquisition, JDA hopes to establish itself as a global supply chain software provider for manufacturers, wholesalers, distributors and retailers.
Infor forked over approximately $1.4 billion to acquire SSA, which just this spring purchased WMS provider Provia. The deal makes Infor the third-largest enterprise software provider in the industry behind SAP and Oracle, with annual sales of $1.6 billion. "In a rapidly consolidating marketplace we have seen that size and scale matter," said Mike Greenough, chairman, president and CEO of SSA Global.
Sterling Commerce, a subsidiary of AT&T, says that Nistevo's Collaborative Logistics Network will help it expand its global reach. The Collaborative Logistics Network is an on-demand, Web-based network that enables shippers and carriers to improve their logistics and supply chain operations with low start-up costs when compared to traditional software solutions. The system is being used by more than 60 shippers.
That's how fast packages are expected to whiz through UPS's 5.1 million-squarefoot distribution center in Louisville, Ky., once its expansion is completed. The world's largest carrier has announced that it is adding 1.1 million square feet of space at its giant UPS Worldport hub. UPS is going ahead with the $1 billion expansion, which will create 5,000 new jobs, in anticipation of continuing strong growth in global trade, according to Mike Eskew, the company's chairman and CEO.
Four years after opening what it calls "the most technologically advanced air package sorting hub in the world," UPS will increase sorting capacity over the next five years by 60 percent to 487,000 packages per hour. When the addition is complete in 2010, UPS smart-label technology will propel packages through the building's 197 miles of conveyor in as little as eight minutes. The movement of packages through the facility is synchronized by a sophisticated system of cameras that read the information encoded on package labels, triggering a network of computer-activated sorting and tracking devices that process 59 million database transactions every hour.
The project will include construction of new ramp space to accommodate the giant A380 and 747-400 cargo planes now on order, plus a new vehicle loading facility for the ground network that serves Louisville.
According to a published report, UPS will be eligible for up to $51.6 million in state and local tax incentives over 10 years. UPS officials defend the tax breaks, arguing that the company's presence in the area has attracted industry. Since it opened its hub, UPS says, nearly 100 companies have moved to Louisville just to be close to the Worldport.
Gartner, Inc.
