Last week, in No Prix Fix Here: A Consolidator’s Menu Part 1 and Part II , Jason Busch of Spend Matters, despite his general skepticism of technology acquisitions, outlined a number of opportunities in the spend management sector that might just be “too good to pass up”. As always, most of these were prime specimens. However, I think a few good morsels were left off the consolidator’s menu and think some of the offerings require a better description if the goal truly is to wet the palette.
Jason started of with the amuse bouche and recommended the last remaining stand-alone spend visibility powerhouse, Zycus , a vendor with strong classification, analysis, and services capability (not to mention a good story to tell for SAP customers) . A fine choice indeed, but let’s not forget TrueSource, even though it appears they may have been ordered already.
For an appetizer, Jason offered a contract management company and a quartet of on-demand offerings. Let’s start with contract management. Although a sophisticated palette might prefer Nextance, a riskier palette might want to try Upside, a new taste sensation from the North. With respect to the on-demand offerings, I think a more refined description is required before a choice can be made. For a light appetite, Hedgehog and Iasta are the true choices, having been designed as on-demand from the ground up. However, when comparing Hedgehog and Iasta, it’s like comparing chips and salsa to oysters rockefeller and caviar. Whereas chips and salsa will leave you hungry for the main course, the oysters rockefeller would be a full meal on its own for many! Hedgehog has a lightweight auction offering while Iasta has a full end-to-end strategic sourcing offering that covers the full executeable strategic sourcing cycle (at least in my book). Vertical Net and Global eProcure are much heavier fare, with their on-demand offerings coming later in the game. Furthermore, with their large customer bases, and significantly higher (venture) capital investments, Vertical Net and Global eProcure may only be tempting to those with heartier appetites. However, there are still some significant differences between these two players. Even though Global eProcure has a number of services offices all over the globe (including China and India), they focussed on breadth to Vertical Net’s depth. Furthermore, the spend and performance management offerings of VerticalNet might be more soothing to those who tend to get heartburn even thinking about global low cost country sourcing. And for those with a hefty appetite, I’d make it a quintet and add Procuri to the mix as one of the few pure-play on-demand solutions on the market. Finally, for those with an appetite for supply risk management, let’s add Apexon to the menu in addition to Vendor Mate and JV Kelly.
Now on to the main courses for our potential consolidators.
For SAP and Oracle, Jason offers Rearden Commerce , an exquisite choice for such discerning diners. However, I’d want to insure that meal consisted of one of the on-demand appetizers and was followed by a specialty consulting desert such as Aptium Global to help them weave affordable solutions for the small and mid-size markets.
For Ariba , although Jason is most likely too modest to ever add his own company, Azul Partners, to the desert menu (or at least a service company with a similar marketing and messaging focus), it would certainly be the creme-de-la-creme for Ariba, a company that should be dining with a fatter wallet. After all, when research has demonstrated that Ariba users are “out-performing their peers in multiple areas“, with the exception of the true on-demand diners (such as Iasta and Procuri) which help buyers get more spend under management more quickly then traditional solutions (see The On-Demand Supply Management Benchmark Report: Enterprises Turn to the Web and Find Quicker and Better ROI to Help Achieve Supply Management Goals ), there should definitely be less diners in our elite specialty restaurant, especially in the traditional installed arena.
Finally, for Procuri, I would recommend it gobble up every small on-demand friendly services provider it can afford, for their customer bases, before SalesForce.com decides its dinner time!