Manhattan Associates, IBM Ink Deal to Expand Partnership
April 2, 2007 Timothy Prickett Morgan
Supply chain software maker Manhattan Associates and IBM have been partners in one form or another for the past 15 years, and last week the two re-upped their partnership and got a little closer together.
Under the deal that was announced last week, Manhattan Associates will code its Integrated Planning Solutions and Integrated Logistics Solutions to run atop various operating systems supported by Big Blue and will deploy that software on IBM’s WebSphere middleware stack and using its DB2 databases and other information management software, such as Transformation Extender and Message Broker. These latter two items are data integration tools that are key components in IBM’s services oriented architecture and distributed platform pushes.
IBM and Manhattan Associates already have joint sales operations in North America, and nearly 1,000 of the 1,200 customers that Manhattan Associates has are using IBM platforms of one kind or another–usually an OS/400 or i5/OS box or a Windows box. Under the expanded deal, Manhattan Associates has agreed to develop its code to work well on the IBM software stack, and IBM has agreed to do joint sales in Asia, Europe, Latin America, and the Middle East, where Manhattan Associates has very little market penetration to date. Asia and Eastern Europe are, of course, exploding geographies for the manufacturing business, and Asia is essentially the supply chain for parts and finished goods for much of the high tech and consumer worlds.
Manhattan Associates posted sales of $288.9 million in 2006, up 17 percent, with net income of $19.3 million, up 77 percent. Given that it is located in Atlanta, it is surprising that Infor has not acquired it yet. Or that some private equity firm hasn’t swept in with some dough to take it private. The company has a market capitalization of around $725 million, and could probably fetch at least $1 billion if it was taken private, even though its growth has come with continual downward pressure on earnings.