E2open acquires Terra to streamline supply chain

Dive Brief:

E2open, a supplier of cloud-based supply-chain management software, announced it is acquiring Terra Technology, which specializes in forecasting consumer demand. Financial terms were not disclosed.
Terra brings to E2open demand sensing, multi-echelon inventory optimization, and transportation forecasting technologies that leverage supply chain data (e.g., point of sale and logistics information) and algorithms to improve supply chain performance.
Austin-based E2open has a slate of big electronics clients such as Foxxconn and HP, while Norwalk, CT-based Terra handles CPG brands.

Dive Insight:

Software companies are consolidating to accommodate the tremendous growth in sellers’ supply chain and logistics management needs arising from e-commerce. The latest to be acquired is Terra Technology, a software company specializing in demand forecasting for big clients such as Procter & Gamble, Unilever and ConAgra. Buyer E2open focuses on cloud-based sourcing and inventory management.

Tech companies see potential in linking demand to the supply chain to help companies forecast and fulfill omni-channel sales. Large retailers such as Nordstrom and Target are investing heavily in software and systems that can tell them what’s needed where as sales shift to online and mobile channels, requiring items to be shipped to homes or picked up in stores. (Earlier this month, for example, former Amazon VP of operations Arthur Valdez joined Target to help revamp its supply chain logistics.)

“We’re thrilled to have Terra Technology join us,” E2open CEO Michael Farlekas said in a release. “Our combination will allow deep information access and collaboration across the extended supply chain to sense demand changes, and react quickly to address supply constraints, optimize inventory and improve in-stock ratios."

Inventory management software company Infor acquired logistics company GT Nexus in a similar transaction in August 2015. Deals like these are bringing together companies involved in front- and back-end processes, with the goal of a global view of supply that begins with item sourcing and ends with sales and reorders.

Consolidation also helps small companies compete with software giants such as SAP and Oracle, which have an edge in offering end-to-end solutions that can help clients right-size inventories.