An Emptoris IPO Will be Great for This Market

Over the past couple of years, I've probably spoken with fifty fund managers and investors, trying to get them fired-up to take a closer look at the procurement and supply chain technology and services sectors. In these chats, I've found that many are still somewhat gun shy given the B2B fallout of the early nineties. But hopefully, if Emptoris does succeed in going out, it will get Wall Street once and for all past the stock meltdowns of i2, Manugistics, FreeMarkets, Verticalnet, Ariba and others who were once worth more than the combined GDP of much of the world (or at least so it seemed at the time).

Now, I'm as in the dark as you are on Emptoris' past financial performance. But if we see in an eventual S/1 what I'm guessing will be solid, stable growth along with a traditional software and revenue recognition model -- with perhaps a tribute to SaaS by showing as much deferred revenue as possible -- and substantial maintenance and non-license revenue as well, then it should appease those who got burned by the sector in the past.

If Emptoris, however, tries to spin themselves as a 100% SaaS company like a SalesForce.com, then I'll be taken aback, because the business model is anything but that given the complexity, implementation and services component of what they do. BTW: I buy that they do hosting for customers. I don't buy that they're true Saas -- and there's a big difference in the two. And besides, what counts are business fundamentals and value creation for customers -- not some frigging business and revenue recognition model that, as Mickey North Rizza pointed out a few weeks back at AMR's supply chain vendor event, matters little in customer's eyes.

So, like everyone else, I'm anxiously awaiting to see what happens to Emptoris later this year (but I'm hoping that they don't play the SaaS card, as that would distract from what really matters). And besides, the free PR of an IPO will be great for Emptoris and everyone else -- vendors, practitioners, and consultants alike. If and when they file, it will be further proof that procurement and supply chain issues are mattering more than ever before, and that companies are willing to spend money on software and services to save money and reduce risk.

Jason Busch

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