Of all the vendors in the Spend Management world, some might argue that Emptoris has the most to lose given SAP's newfound enthusiasm and commitment to the sector. Why Emptoris and not Ariba, you ask? The logics goes something like this: Ariba's large and defensible services capability -- thanks entirely to the FreeMarkets deal, in my book -- leave it less vulnerable than a vendor who is just starting to build similar capabilities out. And let's not forget that Ariba has a huge stealth play in the supplier network as well which can complement other providers in the market if they ever truly can monetize it. I'll admit that the revenue is not there yet in the ASN -- at least as far as I know -- but long-term, the supply chain finance aspect of it could be huge.
Emptoris, in contrast, appears headed on a direct collision course to where SAP desires to go as well. And in the last clash of the titans in the supply chain world -- I'm referring to i2 versus SAP -- we all know who won out, despite the materially better software and services capabilities of the best of breed vendor in question.
But I believe that Emptoris does not have as much to fear as you might think. From a functional standpoint, the Emptoris sourcing and contract management capability remains significantly ahead of SAP at this point in time (and some might argue all of the other broad providers as well, although this is debatable on the sourcing front). In addition, I'm very impressed with the way Emptoris is thinking about supplier performance management and development -- not to mention source-to-pay compliance. In other words, in two key areas that matter, Emptoris remains significantly ahead of where their ERP challenger is today -- let alone where they want to be years from now.
I also think the case can be made that unlike supply chain management, sourcing and procurement is a sector where the partial solution really can leave organizations at a disadvantage. This is especially the case where integrated services can play a huge role in generating successful outcomes. By working with one solutions provider such as Emptoris, Ariba, Verticalnet or CombineNet for complex bid categories -- rather than SAP and their partner ecosystem -- procurement organizations can reduce the risk of failure (and can point the finger at one party if something goes wrong).
So the E-Sourcing battle is anything but won. And Emptoris and other best of breed providers still have a window to take a huge chunk of this market. Above all, even though SAP is to be commended for its smart acquisition of Frictionless last year and their work to date, others have continued to innovate while they have had to focus more on product integration and sales than anything else to prove the business case internally for the overall organization to invest more in the SRM area. If I look into my Spend Management crystal ball, I can promise you only one thing. And that's the ERP versus best of breed battle in the Spend Management arena -- and sourcing, performance management and contract management in particular -- will get even more interesting in the next year.
So to answer my rhetorical question posed in the title line of this post, I'd say that Emptoris should always be paranoid -- as all vendors should -- but that they probably don't have that much to worry about in the near term. Just as the major PLM vendors have successfully defended themselves against the ERP borg, I'd argue that Emptoris has got as good a shot as anyone to thrive in a competitive environment.