i2: The Software Company Even Oracle Didn't Want

Ok, that headline was a little mean. But I wanted to call attention to the fact that the last great 1990s stand alone application company has fallen: JDA Software Group (who?) has bought the once-great supply chain management company i2. i2 was purchased for $346 million, despite $300 million of annual subscription and maintenance fees. Sounds about right.

i2 has been one of those walking dead software companies-- like Siebel, BEA and others Oracle has sucked up like a Hoover Vacuum in recent years-- and its ignominious purchase at a time only software-geeks like me remember its relevance is a testament to how much the "best of breed" approach has failed in enterprise software. I think the same thing is in store for on demand software, which has already been a tougher business model than people thought a few years back, with specialty vendors making less money, with lower market caps. Bring on the acquisitions!

Since this BusinessWeek column about the hidden costs and brutal slog of building on demand software companies ran, I've gotten a load of emails from people telling me how wrong I am  -- mostly from companies with sub-$1 billion market caps and languishing stocks. Somehow, I think these people missed the point of the column. It's not that you can't build a "nice" business in on demand. It's not that it's not the future of software. And it's not that it's not what customers want. It's just that the next generation of multi-billion software names are looking pretty MIA.

Still, congrats to i2 on finally finding what appears to be a good home with JDA, another best-of-breed supply chain company. A lot of people have worked hard to clean up a lot of bubble-inflicted messes at the company and it must be nice to have some finality on some level. Here's a story I did a while back for BusinessWeek that chronicled part of it.