The analyst Gartner this week said a proposed merger between software-as-a-service supply chain vendors GT Nexus and TradeCard
would be a “milestone” in global trade management (GTM) and supply chain multi-enterprise application markets.
But Gartner cautioned the joined entity would still lack a key piece of the GTM equation
“For this merger to fulfill its promise, the two companies must address several technological and operational challenges,” Gartner analysts Tim Payne, William McNeill and Dwight Klappich wrote in a note this week. “First and foremost, they still lack a global trade compliance capability, the third major pillar of GTM. Integration of existing capabilities within the two platforms will be key to achieving an effective system of record to drive multi-enterprise processes. They will also need to support users at different levels of maturity and with widely varied requirements, and attract new customers that may already have high levels of sunk costs.”
But the proposed deal was mostly praised in the research note for its goal of uniting processes that customers until now have had to manage with separate systems.
“Both GT Nexus and TradeCard specialized in a single major area of GTM, with GT Nexus offering global logistics and TradeCard offering trade finance/sourcing and purchase order management,” Gartner wrote. “Both needed to develop additional capabilities. The combined entity could leverage the GT Nexus analytics capability across the TradeCard platform and could leverage TradeCard's application development work across the GT Nexus platform to support potential system innovations.”
The merger is part of a wider growth of multi-enterprise platforms that span verticals and transaction types, as users seek “combined platforms, fewer vendor relationships and more cross-process synergies,” the analysts said. Gartner specifically noted E2Open and GT Nexus, through its relationship with Kinaxis as well as the mooted TradeCard deal.
Gartner said the merger would enable GT Nexus and TradeCard to expand their market presence, geographical reach, and their marketing message.
"Their marketing efforts also face several obstacles,” the analysts said. “The combined offering may be too early, too sophisticated and too high-priced to attract others beyond a small number of very large enterprises. GT Nexus/TradeCard could face renewed competition from the application mega-vendors, as its offering highlights the gulf between multi-enterprise platforms and traditional on-premises business applications. They must convince customers outside of the apparel industry that TradeCard's functionality is applicable to their industries.”- Eric Johnson