Rearden Commerce has been one of the best kept secrets in the Spend Management world for far too long. This is a problem that was benefiting no one (except the early adopters who had the complete attention of the Rearden team). But with the latest investment from American Express and the launch of Amex' new marketplace powered by Rearden, I doubt the vendor will remain a secret to the broader market for long. And for procurement organizations, this is a great thing. What Rearden has done -- however simple the execution and UI layer appears -- is nothing short of remarkable. By building a services Spend Management application with a true service oriented architecture -- which allows Rearden to mask the underlying complexity of tying together hundreds of different external services providers with complex internal workflow and permissions on the fly -- Rearden has gone where no other services procurement vendor has gone before.
Until the American Express deal, Rearden's biggest challenge was gaining acceptance with a broader audience. And that's because services Spend Management is often further down the list compared with traditional eProcurement and category sourcing initiatives for many organizations. But the Amex deal should bring Rearden exposure, not to mention enabling their application to reach both large and SMB customers within the American Express network. By working with Amex -- a huge "channel" master in the consumer sense of the definition -- Rearden is betting that the network effect of its solution requires a mass-market sales approach rather than a one-to-one direct or Big 5 channel type of sales effort. It's not ironic, then, that this sales approach mirrors the network value of the application itself. Consider that American Express works with over 70% of the Fortune 500 in the US and currently manages $20.6 billion in travel spend for nearly 14,000 global accounts. Heck, if 10% of Amex's business customers eventually sign up for the private label Rearden Amex marketplace, then it will be a huge win for both.
I suppose in the broader picture, that Rearden made the strategy decision to push adoption and this one very large deal over going after individual accounts on a direct or channel basis (the new American Express travel marketplace is a private label instance of the Rearden application). Only time will tell whether this was the right long term decision for Rearden -- though I'd bet it is -- but the good news for American Express customers is that they will now have access to what is absolutely bleeding edge -- and real -- services spend management capabilities that go beyond just travel, air and hotel spend to encompass a true virtual compliance-driven concierge. For additional analysis of the deal check out Jason Wood's post as well.