Stand-alone supply chain software provider i2 Technologies today reported first-quarter numbers that echoed those of other enterprise technology purveyors dogged by the recession, with flagging license sales leading a revenue slide. The news came on the heels of i2’s announcement that it has filed a lawsuit against Oracle Corp. alleging patent infringement.
For the three months ended March 31, i2 reported revenue of $56.4 million, down 10% from $62.6 million in the first quarter of 2008. However, unlike many of its enterprise software peers, which have enjoyed higher support and maintenance revenue to counteract license falloff, i2’s sales declined across all three business lines, with software off 13% to $10.2 million; services down 7% to $26.8 million; and maintenance falling 12% to $19.4 million.
“New license sales are down everywhere,” said Ray Wang, a vice president of research at analyst firm Forrester. What’s concerning in i2’s case, he said, is the concurrent falloff in maintenance sales. Wang expects the company to work to boost that number in quarters to come.
Meanwhile, i2’s cost-cutting efforts helped contain the damage to the bottom line, which slid 7% to net income of $2.7 million. During the quarter, the company tapped into its cash reserves to wipe out nearly $65 million in long-term debt.
As recently as March, newly installed President, CEO, and Chairman Jackson Wilson told Managing Automation that i2’s balance sheet made it an attractive acquisition prospect. Wilson’s comments came just months after a proposed tie-up with fellow supply chain specialist JDA Software went south.
In another development, i2 last week filed suit against Oracle, alleging that the acquisitive database and applications company infringed upon 11 of i2’s patents related to supply chain management, available to promise, and other enterprise software applications. The legal action isn’t the first time i2 has pitted itself against a larger enterprise software provider over questions of intellectual property. Last year, i2 prevailed in a separate patent infringement suit against Oracle rival SAP, a case that netted i2 $83 million in settlement payments.
“Our actions today are a continuation of our strategy to protect and monetize our extensive intellectual property and patent portfolio,” said Wilson in a statement.
Asked whether recent infusions to the company’s coffers — $20 million from JDA Software for terminating the planned acquisition and the $83 million from SAP — have distracted i2 from making money the old-fashioned way, Wang said no.