i2 Partnering With A.T. Kearney; Whither The Alliance?

In another move that puts its alliance with Ariba(ARBA) in question, i2 Technologies(ITWO) announced a far-ranging partnership with high-tech consultant A.T. Kearney on Monday.

The two companies are planning to roll out a combined product and service offering called 2Source, which will allow customers to source and buy products over the Internet easier.

The deal would probably be just another love-in between a technologist and an integrator if it weren't for the existing relationship that i2 already has with Ariba, and the heft that A.T. Kearney has in the B2B world.

Last March, i2, Ariba and IBM(IBM) announced a broad partnership to sell and install e-business software. The three-pronged approach seemed to have a lot of promise. i2 specialized in supply-chain software, Ariba focused on procurement, or Internet buying, and software, and IBM had its army of consultants to wire it all together.

But many observers questioned how long that partnership could last, because i2 and Ariba showed increasing signs of competing with one another.

A.T. Kearney, which is the consulting arm of information technology giant EDS (EDS), brings a lot of weight to the i2 partnership. An almost stealth presence in B2B, its 500 consultants are highly regarded within the B2B world for both their strategic and technical expertise.

Now, through 2Source, those consultants will help i2 offer procurement software -- Ariba's bread and butter -- as well as develop software to help companies source the materials they need. Sourcing, which basically means locating the right product at the right price, is an area that Ariba has been trying to get a foothold in since it bought SupplierMarkets.com last year. Since then, it has launched Ariba Sourcing to compete in this area.

Now, it looks like it will be competing -- once again -- with its partner i2.

Lauren Ames, an Ariba spokeswoman who is always somewhat bemused by the speculation that surrounds the i2-Ariba relationship, hadn't heard about the 2Source announcement Monday afternoon. But she pointed out that i2 and Ariba have lots of different partnerships with lots of different companies.

"It was never meant to be an exclusive deal," Ames said.

For its part, i2 said the deal shouldn't put it in conflict with Ariba. But an executive also implied that Ariba didn't have everything i2 wanted.

"Ariba is an important partner, not only of ours, but also with EDS and A.T. Kearney," said Baxter Nairon, director of business development strategy at i2. Yet at the same time, he said sourcing isn't Ariba's strong point. "Ariba and Commerce One(CMRC) and the others do a fine job on the indirect [procurement] piece, but in the strategic sourcing area, it's just an incomplete solution."

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