Forward-Looking Statements

This report contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements other than statements of historical or current facts, including, without limitation, statements about our business strategy, plans, objectives and future prospects, are forward-looking statements. Such forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from these expectations, which could have a material adverse effect on our business, results of operations, cash flow and financial condition. Such risks and uncertainties include, without limitation, the following:

• Beginning in the third quarter of 2008 and continuing through and beyond our second quarter of 2009, we have experienced purchasing delays and a reduction in maintenance services by some customers and prospects attributable to the current economic environment, uncertainties caused by the termination of our planned merger in the fourth quarter of 2008 and continued speculation about our future strategic direction. The current economic downturn may result in customers and prospects reducing their capital and maintenance expenditures, filing for bankruptcy protection or ceasing operations, which would negatively affect our bookings, revenue and cash flows.

• We have implemented and continue to evaluate restructuring and reorganization initiatives, including a reduction in our workforce in the first quarter of 2009 and reorganization of our sales force. Failure to achieve the desired results of our restructuring and reorganization initiatives could harm our business, results of operations, cash flow and financial condition.

• We experienced historical volatility in our quarterly cash flows. A failure to maintain profitability and achieve consistent positive cash flows would have a significant adverse effect on our business, impair our ability to support our operations and adversely affect our liquidity.

• We may require additional private or public debt or equity financing. Such financing may only be available on disadvantageous terms, or may not be available at all. Any new financing could have a substantial dilutive effect on our existing stockholders.

• If we are unable to develop and generate additional demand for our products or develop new products, serious harm could result to our business.

• We may not be competitive, and increased competition could seriously harm our business.

• We face risks related to product quality and performance claims and other litigation that could have a material adverse effect on our relationships with customers and our business, results of operations, cash flow and financial condition. We may face other claims and litigation in the future that could harm our business and impair our liquidity.

• Loss of key personnel or our failure to attract, train, and retain certain additional personnel could negatively affect our operating results and revenues and seriously harm our company.

• We face other risks indicated in Item 1A, "Risk Factors," in the 2008 Annual Report on Form 10-K.

Many of these risks and uncertainties are beyond our control and, in many cases, we cannot accurately predict the risks and uncertainties that could cause our actual results to differ materially from those indicated by the forward-looking statements. When used in this document, the words "believes," "plans," "expects," "anticipates," "intends," "continue," "may," "will," "should" or the negative of such terms and similar expressions as they relate to us, our customers or our management are intended to identify forward-looking statements.

References in this report to the terms "optimal" and "optimization" and words to that effect are not intended to connote the mathematically optimal solution, but may connote near-optimal solutions, which reflect practical considerations such as customer requirements as to response time, precision of the results and other commercial factors.

Overview

Nature of Operations

We operate our business in one segment, supply chain management solutions, that are designed to help enterprises optimize business processes both internally and among trading partners. We are a provider of supply chain management solutions, consisting of various software and service offerings. Our service offerings include business optimization and licensed technical consulting, managed services, training, solution maintenance, software upgrades and development. Supply chain management is the set of processes, technology and expertise involved in managing supply, demand and fulfillment throughout divisions within a company and with its customers, suppliers and partners. The business goals of our solutions include increasing supply chain efficiency and enhancing customer and supplier relationships by managing variability, reducing complexity, and improving operational visibility. Our offerings are designed to help customers better achieve the following critical business objectives:

Visibility - a clear and unobstructed view up and down the supply chain

Planning - supply chain optimization to match supply and demand while considering system-wide constraints

Collaboration - interoperability with supply chain partners and elimination of functional silos

Control - management of data and business processes across the extended supply chain

Revenue Categories

We recognize revenue for software and our related service offerings in accordance with Statement of Position (SOP) 81-1, "Accounting for Certain Construction Type and Certain Production Type Contracts," SOP 97-2, "Software

Revenue Recognition," as modified by SOP 98-9, "Modification of SOP 97-2, Software Revenue Recognition with Respect to Certain Transactions," SEC Staff Accounting Bulletin (SAB) 104, "Revenue Recognition," and SAB 103, "Update of Codification of Staff Accounting Bulletins," and SEC Staff Accounting Bulletin "Topic 13, Revenue Recognition."

Software Solutions. Software solutions revenue includes core and recurring license revenue, and revenue to develop the licensed functionality. We recognize these revenues under SOP 97-2 or SOP 81-1 based on our evaluation of whether the associated services are essential to the licensed software as described within SOP 97-2. If the services are considered essential, revenue is generally recognized on a percentage of completion basis under SOP 81-1. Services are considered essential to the software when they involve significant modifications or additions to the software features and functionality. In addition, we have several subscription and other recurring revenue transactions, which are recognized ratably over the life of each contract.

Services. Services revenue is primarily derived from fees for services that are not essential to the software, including implementation, integration, training, consulting, hosting, and managed services, and is generally recognized when services are performed. In addition, services revenue may include fees received from arrangements to customize or enhance previously purchased licensed software, when such services are not essential to the previously licensed software. Services revenue also includes reimbursable expense revenue, with the related costs of reimbursable expenses included in cost of services.

Maintenance. Maintenance revenue consists of fees generated by providing support services, such as telephone support, and unspecified upgrades/enhancements on a when-and-if available basis. A customer typically prepays maintenance and support fees for an initial period, and the related revenue is deferred and generally recognized over the term of such initial period. Maintenance is renewable by the customer on an annual basis thereafter. Rates for maintenance, including subsequent renewal rates, are typically established based upon a specified percentage of net license fees as set forth in the contract.

Key Performance Indicators and Operating Metrics

The markets in which we operate are highly competitive. Our competitors are diverse and offer a variety of solutions targeting various segments of the extended supply chain as well as the enterprise as a whole. Some competitors offer suites of applications, while most offer solutions designed to target specific processes or industries. We believe our principal competitors continue to strengthen, in part based on consolidation within the industry. In addition, our shift to a more solutions-oriented approach, where services are more critical, increases our exposure to competition from offshore providers and consulting companies. All of these factors are creating pricing pressure for our software and service offerings. However, we believe our focus on a solutions-oriented approach that leverages our deep supply chain expertise differentiates us from our competitors.

In managing our business and reviewing our results, management focuses most intently on our revenue generation process, including bookings, backlog, revenue, cash flow from operations and liquidity.

Bookings. We define bookings as the total value of non-contingent fees payable to the company pursuant to the terms of duly executed contracts. Bookings are expected to result in revenue as products are delivered or services are performed, and may reflect contracts from which revenue will be recognized over multi-year periods, however there can be no assurance that bookings will result in future revenue. Bookings do not include amounts subject to contingencies, such as optional renewal periods, amounts subject to a customer's internal approvals, amounts subject to customer specific cancellation provisions and amounts that are refundable for reasons outside of our standard warranty provisions. Based on the nature of the transactions, certain of our subscription bookings have termination provisions upon payment of a penalty. Because our revenues are recognized under several different accounting standards and thus are subject to period-to-period variability, we closely monitor our bookings as a leading indicator of future revenues and the overall performance of our business.

Total bookings for the three months ended June 30, 2009 and June 30, 2008 were $61.6 million and $64.1 million, respectively, a decrease of 4% or $2.5 million. Included in total bookings are $23.5 million and $4.2 million of multi-year contracts, respectively. Total bookings for the six months ended June 30, 2009 and June 30, 2008 were $128.1

million and $130.5 million, respectively, a decline of approximately 2% or $2.4 million. This includes $32.1 million and $7.7 million of multi-year contracts, respectively. The multi-year contracts in the three months ended June 30, 2009 include approximately $13.5 million in maintenance agreements and $10 million in software solutions, which is higher than in previous quarters. The average term of these multi-year agreements is slightly less than 3 years.

Backlog. Backlog represents the balance of bookings that has not been recognized as revenue. The amount of backlog for which we have received payment is recorded as deferred revenue on our condensed consolidated balance sheet. We review our backlog to assess future revenue that may be recognized from bookings in previous fiscal periods. This review allows us to determine whether we are recognizing more or less revenue compared to the bookings in that period and whether our backlog is increasing or decreasing.

                                               Three Months Ended                                  Twelve Months Ended
                                     June 30, 2009            March 31, 2009         December 31, 2008             December 31, 2007
Additions to Backlog:
Software Solutions Bookings        $          14,815          $        24,062       $             29,812          $            54,556
Platform Technology/Source
Code Bookings                                     -                        -                          -                           500

Net Additions to Backlog                      14,815                   24,062                     29,812                       55,056
Less: Software Solutions
Revenue Recognized                            15,269                   10,203                     46,852                       47,721

Increase/(Decrease) in
Backlog                            $            (454 )        $        13,859       $            (17,040 )        $             7,335

Revenue. For the three months ended June 30, 2009, total revenue decreased by 12% or $7.7 million compared to the same period in 2008 and decreased by 11% or $13.9 million for the six months ended June 30, 2009 compared to the same period in 2008. The changes in each category of our revenue are described below.

Software solutions revenue increased 21% or $2.7 million for the three months ended June 30, 2009 compared to the same period in 2008, and increased 5% or $1.2 million for the six months ended June 30, 2009 compared to the same period in 2008 due to revenue recognized from our SOP 81-1 transactions. The increase primarily resulted from the significant software solutions bookings in the first quarter of 2009

Services revenue decreased 23% or $6.9 million for the three months ended June 30, 2009 when compared to the same period in 2008 and decreased 15% or $9.0 million for the six months ended June 30, 2009 when compared to the same period in 2008. The decrease was driven by a decline in demand for our services due to our customers' economic constraints, resulting in a 20% and 14% reduction in billable hours, respectively. We adjusted our services capacity accordingly through cost reductions including decreasing our average headcount by 10% and 9%, respectively, as well as reducing our usage of third party contractors.

Maintenance revenue decreased 16% or $3.5 million for the three months ended June 30, 2009 when compared to the same period in 2008 and decreased 14% or $6.1 million for the six months ended June 30, 2009 when compared to the same period in 2008. This decrease was primarily due to the impact of lower renewal rates as well as cancellations of certain contracts by customers who previously had multiple maintenance agreements. In addition, a significant maintenance-paying customer decided not to renew maintenance in the second quarter of 2009, which resulted in a $1.0 million reduction in maintenance revenue for the three and six months ended June 30, 2009 when compared to the same period in 2008. This trend of lower renewal rates and customer losses may continue if our customers reduce their expenditures during the current economic downturn.

Operating Cash Flow and Liquidity. We closely monitor our operating cash flow, working capital and cash levels. In doing so, we attempt to limit our restricted cash and cash balances held by foreign subsidiaries.

Our operating cash flow for the six months ended June 30, 2009 was $22.3 million compared to operating cash flow of $20.4 million in the six months ended June 30, 2008 primarily due to our cost reductions as a result of our restructuring and reorganization efforts.

Our working capital was $124.9 million at June 30, 2009, compared to the $106.5 million balance at March 31, 2009 and the $187.4 million at December 31, 2008. In the first quarter of 2009, we used $84.8 million to repurchase debt, see Note 3, Borrowings and Debt Issuance Cost.

The chart below shows the components of our working capital and the dollar changes from December 31, 2008 through the first and second quarters of 2009.

                                    WORKING CAPITAL.
                               June 30, 2009     March 31, 2009     December 31, 2008
  Total cash                  $       181,532   $        166,580   $           243,790
  Accounts receivable                  20,989             22,980                25,846
  Other current assets, net             7,203              7,418                 9,477

  Total current assets                209,724            196,978               279,113


  Current liabilities                  32,594             31,865                38,650
  Deferred revenue                     52,202             58,597                53,028

  Total current liabilities            84,796             90,462                91,678


  Working capital             $       124,928   $        106,516   $           187,435


  Net cash                    $       181,532   $        166,579   $           157,540

In addition to assessing our liquidity based on operating cash flow and working capital, management also considers our cash balances and our net cash balance, which we define as the sum of our total cash and cash equivalents and restricted cash minus the face value of our debt.

Application of Critical Accounting Policies and Accounting Estimates

There have been no changes during the second quarter of 2009 to the critical accounting policies or the areas that involve the use of significant judgments and estimates we described in our 2008 Annual Report on Form 10-K.

Analysis of Financial Results - Three Months Ended June 30, 2009 Compared to Three Months Ended June 30, 2008.

Summary of Second Quarter 2009 Results

• Total revenue decreased $7.7 million from the same period in 2008

• Total costs and expenses increased $64.6 million from the same period in 2008. Total costs and expenses in the second quarter of 2008 included a benefit of $81.3 million, net of external patent litigation expenses, related to the company's intellectual property settlement.

• Net income applicable to common stockholders was $9.8 million compared to $80.2 million in the same period in 2008. The second quarter of 2008 net income applicable to common stockholders amount includes $79.9 million, net of external patent litigation expenses and applicable taxes, from the intellectual property settlement.

• Diluted earnings per share were $0.36 for the second quarter of 2009 and $3.03 for the second quarter of 2008

• Cash flow from operations was $14.6 million versus cash flow from operations of $11.5 million in the 2008 period

• Total bookings were $61.6 million versus $64.1 million in the same period in 2008. This includes $23.5 million and $4.2 million of multi-year contracts, respectively.

Revenues

The following table sets forth revenues and the percentages of total revenues of
selected items reflected in our condensed consolidated statements of operations
and comprehensive income for the three months ended June 30, 2009 and June 30,
2008. The period-to-period comparisons of financial results are not necessarily
indicative of future results.



                                   Three Months                         Three Months
                                      Ended                                Ended                                Change 2009 versus 2008
                                     June 30,        Percent of           June 30,        Percent of           Three months ended June 30
                                       2009           Revenue               2008           Revenue             $ Change            % Change
SOP 97-2 recognition              $          979              2 %      $        1,427              2 %      $         (448 )             -31 %
SOP 81-1 recognition                       9,689             17 %               5,392              8 %               4,297                80 %
Recurring items                            4,601              8 %               5,750              9 %              (1,149 )             -20 %

Total Software solutions                  15,269             27 %              12,569             19 %               2,700                21 %
Services                                  23,598             41 %              30,508             47 %              (6,910 )             -23 %
Maintenance                               18,188             32 %              21,651             33 %              (3,463 )             -16 %

Total revenues                    $       57,055            100 %      $       64,728            100 %      $       (7,673 )             -12 %

Software Solutions Revenue. Total software solutions revenue increased 21% or $2.7 million for the three months ended June 30, 2009 compared to the same period in 2008. The components of the changes in software solutions revenue are explained below.

Revenue recognized under SOP 97-2 for the three months ended June 30, 2009 decreased 31% or $0.5 million compared to the same period in 2008. During the three months ended June 30, 2009 we recognized revenue related to 6 contracts at an average of $0.15 million per contract compared to 12 contracts at an average of $0.12 million in the same period of 2008.

Revenue recognized under SOP 81-1 increased 80% or $4.3 million for the three months ended June 30, 2009 when compared to the same period in 2008, primarily due to a significant increase in SOP 81-1 bookings in the first quarter of 2009. During the three months ended June 30, 2009, we recognized revenue related to 15 projects at an average of $0.64 million per project compared to 23 projects at an average of $0.23 million in the same period of 2008. Approximately $9.6 million of the software solutions revenue in the three months ended June 30, 2009, including revenue associated with essential services was from prior period bookings compared to $5.5 million recognized from prior period bookings for the same period in 2008. This amount was impacted by the significant software solutions bookings recorded in the first quarter of 2009.

Revenue from recurring items decreased by 20% or $1.1 million for the three months ended June 30, 2009 when compared to the same period in 2008. This decrease resulted primarily from a license arrangement that was required to be recognized ratably over the 12 months ended December 31, 2008 based on its terms. That arrangement is subject to a maintenance agreement in 2009.

Services Revenue. Services revenue decreased 23% or $6.9 million for the three months ended June 30, 2009 compared to the same period in 2008. The decrease was driven by a decline in demand for our services due to our customers' economic constraints, resulting in a 20% reduction in billable hours. We adjusted our services capacity accordingly through cost reductions including decreasing our average headcount by 10% as well as reducing our usage of third party contractors.

Services revenue is dependent upon a number of factors, including:

• the number, value and rate per hour of services transactions booked during the current and preceding periods,

• the number and availability of service resources actively engaged on billable services projects,

• the timing of milestone acceptance for engagements contractually requiring customer sign-off, and

• the timing of cash payments when collectability is uncertain

Maintenance Revenue. Maintenance revenue decreased by 16% or $3.5 million for the three months ended June 30, 2009 compared to the same period in 2008. This decrease was primarily due to the impact of lower renewal rates as well as cancellations of certain contracts by customers who previously had multiple maintenance agreements. This trend of lower renewal rates and customer losses may continue if our customers reduce their expenditures during the current economic downturn. In addition, a significant maintenance-paying customer decided not to renew maintenance in the second quarter of 2009, which resulted in a $1.0 million reduction in maintenance revenue for the three months ended June 30, 2009 when compared to the same period in 2008.

Maintenance revenue varies from period-to-period based on several factors, including:

• initial maintenance from new software solutions bookings,

• the timing of negotiating and signing of maintenance renewals,

• completing a renewal several months into the annual maintenance period resulting in a one-time catch up for the period that maintenance services were performed prior to signature of the contract. A similar catch-up of revenue occurs due to the timing of cash receipts for cash basis customers when cash is not received until several months into the maintenance period,

• renewals that occur on less favorable terms than in the prior period, and

• customers that do not renew their maintenance agreements.

International Revenue. Our international revenues included in the categories discussed above are primarily generated from customers located in Europe, Asia, Latin America and Canada. International revenue totaled $28.5 million, or 50% of total revenue, in the three months ended June 30, 2009 compared to $28.7 million, or 44% of total revenue, in the same period in 2008.

Customer Concentration. During the periods presented, no individual customer accounted for more than 10% of total revenues.

Impact of Indian Rupee on Expenses

A large portion of our employee base is located in India, and as a result, a significant portion of our fixed expenses is denominated in the Indian Rupee (INR). Therefore, as the INR exchange rate fluctuates against the U.S. Dollar (USD), the resulting impact on our consolidated USD expenses can be significant. The impact of the depreciation in the value of the rupee was approximately $0.9 million less expense for the three months ended June 30, 2009, when compared to current period rupee expenditures at the prior year foreign exchange rates.

Cost of Revenues

The following table sets forth cost of revenues and the gross margins of
selected items reflected in our condensed consolidated statements of operations
and comprehensive income for the three months ended June 30, 2009 and June 30,
2008. The period-to period comparisons of financial results are not necessarily
indicative of future results.



                                   Three Months                   Three Months
                                      Ended                          Ended                          Change 2009 versus 2008
                                     June 30,                       June 30,                      Three months ended June 30
                                       2009         Margin            2008         Margin          $ Change           % Change
Software solutions                $        2,625        83 %     $        2,874        77 %     $         (249 )             -9 %
Services                                  14,990        36 %             23,624        23 %             (8,634 )            -37 %
Maintenance                                2,137        88 %              2,655        88 %               (518 )            -20 %

Total cost of revenues            $       19,752        65 %     $       29,153        55 %     $       (9,401 )            -32 %