One Hundred and Six Years Ago Today …

The United States Supreme Court declared Standard Oil to be an “unreasonable” monopoly under the Sherman Antitrust Act and ordered the company broken up. Given the constant M&A spree across the technology space as a whole, and not just the Procurement space, the concept of an unreasonable monopoly is again becoming relevant.

Alphabet (Google), Apple, IBM, Microsoft, and Oracle are all Fortune 100 companies, and all of these not only control massive amounts of data (that is now more valuable than gold), but massive amounts of software — and in most cases, back office software and, in a couple of cases, Procurement software. Now, only Oracle has a major Procurement offering, with SAP (Ariba), a Fortune 200, being the biggest in our space, and makes companies like Coupa (at a mere 1.67 B valuation, 1/70th of SAP’s) a drop in the bucket, but still, at the rate Coupa in particular is gobbling up companies and building a best-in-class S2P offering, it won’t be long before an Alphabet, Apple, Microsoft, or even a Salesforce take interest and gobble them up, offering an integrated inbound-outbound back-office management system at a 100B+ valuation like SAP.

At this point you gotta wonder if we’re soon going to have to worry about technology monopolies and our software companies being broken up — Alphabet has undue influence over the internet even compared to Apple and Microsoft; Microsoft has undue influence over the desktop even compared to Apple; and Apple has undue influence on the mobile market with its iPhones and iPads, and these companies all have a host of other offerings (subsidized by the insane profits their primary product lines offer) that are, or will, become hard to compete with. And if one of these companies ever gets the IBM back-office model or the Oracle one-instance model right, they will literally have an enterprise software monopoly.

And the sad thing is that while data, internet, desktop and software monopolies are bad, right now Fortune 500 / Global 3000 companies desperately need end to end solutions in order to be efficient, effective, and bring their laggard supply management programs into the modern era. We need a few apparent monopolies to define the space, get it recognized, advanced the laggards to the point where they are ready for best in class solutions, but then we need these monopolies hampered so that new best in class companies have a chance to take the space program. It’s a delicate balance that is needed, but will it be maintained?

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