As an analyst in the supply chain market for 15 years, I have written many articles on best-of-breed technology companies purchased by a larger company. Today I am writing my take on the acquisition of Terra Technology by E2open. In the market announcement yesterday the terms of the acquisition were not disclosed. I have followed both of these companies for 15 years and writing this post is bittersweet. It is a story of supply chain innovation. Let’s start by taking a look at history.
History of Terra Technology
Terra Technology is 15-years old. Its first customers were Campbell’s Soup and Procter & Gamble. The initial software product release name was Real-Time Forecasting. The product naming convention changed to Demand Sensing (DS) in 2005. DS replaced rules-based forecast consumption with better math (statistics and pattern recognition). Over the last decade the use of Terra Technology’s DS product improved short-term demand forecasts by 37% at 13 consumer products, and food and beverage companies. In 2007-2014 Terra added inventory management, multi-tier demand sensing, transportation forecasting, and long-term forecasting. The adoption of Terra’s products were brisk until 2011, but during 2012-2014 sales softened, resulting in employee layoffs and downsizing. The founders remain, and the company is private, and tightly-held.