… providers that raised big bucks on vision and overhyped third party tech will begin to fall like dominos. (So choose your provider wisely over the coming year!)
And you knew this was a comin’ after our little lyrical rant on the Post-ZIRP World, especially if you were paying extra attention to THE REVELATOR‘s postings and the following discussion streams on LinkedIn.
THE REVELATOR, who claims that the only “AI” providers who will survive in ProcureTech will be:
- 💯 AI Operating System Solution Providers
- 💯 Front-End Functional AI Solution Providers
In simpler terms:
- those that provide a foundation for ProcureTech solutions built on AI tech
- those that provide AI-enabled front-end for more “human” interfaces to sophisticated back-end technology
Whereas I claim the only providers sure to survive are those:
- who identified a problem, built a solution to solve that problem (working with [potential] customers), and delivered that solution successfully, possibly without any AI whatsoever (as not all solutions need UI)
The key here, and even in THE REVELATOR‘s examples, is that the company focussed on real-world problems of (potential) customers, built a real solution to solve that problem, and worked with customers to successfully implement that solution.
To this end, after a point was raised about how 2025 is going to be a bumpy ride for many companies that raised too much with their deft timing of bandwagon hopping, THE REVALATOR asked three very important questions that the doctor is all too happy to answer:
1. Will solution providers’ focus shift from funding to addressing the decades-long challenge of the high rate of initiative failures?
Not until the funding starts to dry up again. And even then they will again listen to the marketing mad men and try to save their souls with sound-bite marketing and gimmicks. When that fails, most of those who remain will try to slash costs across the board, focus on keeping and upselling existing customers, and double down on prayer until they can see ZIRP again through the telescope. At which point they will jump on the new hype-cycle driven bandwagon and try to raise cash to build garbledy-gook powered ProcureTech.
With the exception of suites with a large enough install base to survive indefinitely on current revenues (possibly with some significant operating cost reductions), only those currently focussed on solving real problems, and who continue on that path, will double down on trying to reduce not just failures, but even bumps in implementation to make sure every customer is happy out of the gate to the point those customers talk about them with their peers at networking meetups and they have leads coming in without cold calls.
2. With some notable solution map logos or brands running out of cash, how will it impact the post-AI Bubble Burst solution provider landscape?
A lot will disappear. Those who see the writing on the wall now, even though they won’t admit it, are already putting themselves out there for acquisition while the multiples are good. Those who don’t will scramble to merge with partners or take firesale deals just to stay alive. Those who fail at that will just disappear.
3a. What will be the common characteristic of solution providers who remain?
Answered in part 1 – those that focus on solving real problems, and doing so at a fair, sustainable price point for them AND the client, who, since happy with the solution, will continue to renew and even add more modules/capability over time.
3b. What will be the common characteristics of those who disappear?
Those who went all in on the Gen-AI or orchestration bandwagon, didn’t build any unique and original functionality that solves real procurement problems, tried to build a business on overpriced third party tech (not due to third party tech fees, but the ridiculous multiple they have to charge because they raised too much money and the investors are demanding a return), and failed.
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