AMR to Revisit Private Company Revenue Numbers

As many of you know, I'm a frequent reader of AMR Research's analysis of the Spend Management market. Personally, I think that AMR is one of the few firms that is making a concerted effort to follow the sector. And with the recent addition of Mark Hillman and Mickey North Rizza to the AMR team, this coverage will only get better. But recently, there's been a lot of chatter about the accuracy of the some of the vendor revenue numbers that AMR reported in the report titled The Procurement and Sourcing Applications Report, 2004-2009 (registration and subscription required).

Specifically, it would appear that based on various rumors that I've heard in the market that the revenue numbers for some of the privately held vendors in the report such as Emptoris, Frictionless, and others might be exaggerated -- in some cases significantly so. It's my guess that this is not AMR's fault. Having been on the vendor and analyst side of the market in former lives, one theory into what might have happened is that AMR listened to privately-held vendors on the phone, taking down "revenue ranges" that vendors provided off-the-record (enabling the vendors to deny that any conversation actually occurred if questioned later). At the same time, AMR most likely also extrapolated revenue numbers from past projections as well to help fill in any blanks. But the short of it is that at least some of the private company revenue numbers mentioned in this report appear to be inaccurate.

I called Emptoris on this earlier in the month and they denied giving any numbers to AMR. A few weeks ago, I decided to contact AMR about this, but it's taken some time to speak to the right folks on their quant research team to discuss the matter. Late this afternoon, when I finally connected with them, they said that they were doing "further due diligence" on the numbers and would issue a "revised report" in the near future. Clearly, AMR is taking this matter very seriously. Which they should. This report is what vendors, consultants, investors, and users use to size the market and consider their own strategies. AMR's willingness to reinvestigate their own forecasting shows how seriously the firm takes its role in the marketplace. We should all applaud this intellectual honesty to get at the right answer. And I'd like to think that a little bit of "investigative blogging" helped them to reconsider their earlier numbers -- at least in a small way.

-Jason Busch

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