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Merger could challenge SAP and JDA in supply chain control-tower market.

Supply chain planning software vendor E2open Inc. has acquired Terra Technology in a major move to challenge SAP SE and JDA Software Group Inc. at the top of the fast-growing control-tower sector.

Terms of the deal were not disclosed.

The move combines Terra’s demand-forecasting capabilities with E2open’s network of production and distribution planning to offer a single source for end-to-end visibility, as well as the ability to adjust to changing market conditions on the fly, the company said.

Norwalk, Conn.-based Terra provides logistics algorithms in the areas of demand sensing, inventory optimization, and transportation forecasting. By combining data from point-of-sale terminals, weather reports, and other sources, the software can help its users make more accurate market predictions.

E2open, headquartered in Austin, Texas, provides collaborative planning and execution software that supports supply chain visibility across users’ global trading networks.

In a global economy where e-commerce has accelerated market volatility, consumer packaged good (CPG) companies have been demanding software tools that allow them to run a demand-driven supply chain that can react to sudden changes in real time, said James Cooke, a principal analyst with Nucleus Research in Boston.

“Companies want better supply chain visibility in order to make course corrections,” Cooke said. “They want a control tower; SAP is doing this now, and JDA has one. But E2open just vaulted over everybody by buying the guy who makes the best algorithm.”

Now that E2open and Terra Technology have the ingredients to build a better control tower, their next challenge will be integrating the two complex software platforms.

“If they can pull this off, they would be very well positioned to become the top vendor in this marketplace,” Cooke said. “This is a major shakeup.”

E2open will also gain access to Terra Technology’s long list of clients, including many leaders of the CPG field, such as Procter & Gamble, Unilever, Mondel?z International Inc., Kimberly-Clark Corp., ConAgra Foods Inc., and Kellogg Co.

By Ben Ames

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