Staying on Top of the SAP / Frictionless Announcement

I have to admit that I was a bit jealous of the way AMR Research beat me to the punch with the SAP / Frictionless deal last week. I've already congratulated Mickey North Rizza on a job well done. But given AMR's recent excellent track record covering the Spend Management sector, I would expect nothing less. But the more important news for everyone with a vested interest in Spend Management is that this relatively small deal is generating some serious attention. Other research firms and resources are covering the news as well, besides the usual suspects. Andrew Bartels of Forrester who I bumped into a couple of weeks back at Ariba Live, issued this informative brief(subscription required) that argues, "the Frictionless acquisition does significantly improve SAP's product offering in sourcing. However, it still leaves other gaps in SAP's SRM suite, such as contract management, spend analysis, sourcing bid optimization, and supplier enablement." In the introduction, Andy goes onto say that that Forrester expects SAP "to close those gaps through a combination of: 1) internal software development (building); 2) one more acquisition (buying); and 3) partnerships with independent software vendors (ISVs)."

I disagree with Andy to some degree on the contract management gap. In my view, Frictionless' contract management capabilities, while not industry leading, cover a decent footprint overall. But while I do agree with the rest of Andy's statements, I wonder what potential acquisition he is referring to. Regardless, perhaps SAP's acquisitiveness in the sector will be the wake up call that Ariba needs to put the consolidator hat back on as well. As a final aside, I find it curious that Aberdeen, which is usually on top of such announcements, has not issued a brief yet. Perhaps we'll see something from them later in the week.

Jason Busch

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