Comments, Biases, and Such

In the past month or so, the comments section of Spend Matters has become much more active. Personally, I'm thrilled about this. Please keep up the conversation and candid dialogue -- especially if your comments posit alternative viewpoints not expressed in the regular blog entries. I want to make sure that all voices are heard on Spend Matters.

But last week, there was one comment that suggested there is "a clear slant" on this site in response to some comments and past entries that mentioned Perfect Commerce. I think it's important to reiterate that Spend Matters is a blog -- which is subjective by nature -- but one that is informed by my strong opinions and deep experience and knowledge in the industry. If you think I'm a rambling lunatic, that's fine. You're entitled to your opinion. But at least it's an opinion that I would stick with regardless of medium. If an attendee at a speaking event asked me if I had an issue with Perfect, I would say absolutely. In my opinion, Perfect (formerly eScout) has been rolling up second tier vendors with second tier Spend Management solutions for years (e.g., Purchase Pro (Bay Builder), Commerce One, and Perfect, which did not match the capabilities of Emptoris and Frictionless, the two other end-to-end sourcing platform vendors to emerge at the same-time). And unlike SSA, software M&A integration is not the core expertise of the leadership team, creating additional risk for customers and shareholders alike.

But what about Perfect's significant $30 million cash influx late last year? In my view, Perfect has been able to raise this capital because their CEO is well known in the insurance and banking world, not because of the management team's Spend Management and subject matter expertise or software development leadership skills. Just before the last investment round, a potential investor called me and wanted my opinion. I gave it to them, but they ignored it and made the investment. And I hope it pays off for them, but if it was my money, I would have run as fast from that deal as I could.

Seriously, how could anyone look me in the eye and tell me that a vendor with only two hundred employees can enhance and support applications (which they now own) from nearly half a dozen vendors successfully, including Commerce One, which at one point had more professional services and support personnel than Perfect has overall now. And aren't there enough platform vendors in the sector already? Sure, you say, but how about their supplier network, which many argue is nipping on the heels of Ariba’s ASN? Anecdotally, I have heard numerous stories in the past 12 months about customer support issues, especially on the supply side. This should come as no surprise given the number of solutions Perfect must support relative to overall headcount. So even if some of their solution areas are differentiated, it's a highly a mixed bag from an informed investment thesis perspective, and I know based on the questions that Perfect's most recent investors posed to be that they had no clue how the Spend Management sector really operates from a customer perspective.

So call me biased and opinionated. But just as I think it's important to call out whether the sales / commercial leader of the largest vendor in the sector should be compensated at $4 million per year despite declining revenue and that another vendor has gone through a number of COOs, I think it's important to get all issues on the table regarding participants operating in the space, and let Spend Matters readers decide for themselves what to think. Of course, I welcome your comments! If you think I'm dead wrong, tell me, and tell the rest of the Spend Matters community. But don't imply that this blog is slanted or informed by outside dollars.

Jason Busch

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