Procuri put out some strong rhetoric in the past few weeks, according to an article in Supply and Demand Chain Executive. Citing a "71 percent increase in total revenue in 2005 over 2004 and a 63 percent compound annual growth rate for the last two years," the article also describes "how the company signed 149 contracts in 2005, representing 51 new customers, which Procuri attributed to the growing awareness that supply relationship strategies are critical to corporate performance." Pretty impressive numbers, but I'd caveat them by saying that part of the growth obviously came through acquiring CMSI, a contract management provider (and given the SaaS model, I'd bet that any past CMSI customer who renewed with Procuri during the period is probably counted as a new number in that figure). So while impressive, I'd argue that there's certainly some creative license behind what numbers Procuri shares with the public. Personally, to more accurately compare Procuri's organic growth against other Spend Management vendors, I'd like to know what those numbers would have looked like without CMSI.
Also, what's missing from these headlines is the fact that Procuri goes through COOs faster than Paris Hilton goes through, well, I'll leave that up to you. But don't get me wrong. I'm bullish on Procuri, and think they'll continue to get excellent traction in the market, as their revenue and customer numbers continue to climb. And I also know first hand that executive challenges are common in companies going through fast growth. Still, I think it's important to dig below the rhetoric, especially when all the news appears unbelievably positive. There's growing success and growing pains at all high-growth tech firms, and don't think for a minute that Procuri is immune from the latter.
What's more interesting to me, however, are Procuri's longer-term prospects (which I think from a percentage growth standpoint, are probably the largest in the Spend Management market today, if they play their cards right). Why? Procuri has an opportunity to own the Spend Management mass market (made up of the tail end of the early majority, as well as the late majority and laggards) on the Rogers Innovation / Adoption Curve. Sure, there are more advanced sourcing and contracting capabilities available in the market for those who want to go through the hassle of licensing, implementing and configuring traditional enterprise software (and at the same time, there are a few procurement leaders who've gone with Procuri, content with the 80-90% solution that simply don’t want to shell out the bucks for leading edge, non SaaS stuff). But I'd argue the opportunity in the mass market is an order of magnitude larger than with early adopters and parsimonious Fortune 500 firms. If Procuri takes a number from Salesforce.com on how to market and package itself to this mass audience, they could set themselves up for huge, sustained growth (just like Salesforce). For the sake of the Spend Management movement (which still needs to reach past innovators and the early majority), I sincerely hope they pull it off.