A Perfect Update (Part 2)

Earlier in the week, I provided some context behind CorMine's merger/acquisition of Perfect. Clearly, this unorthodox, unpredicted deal brought together two very different providers. Today, I thought I'd take a virtual page or two to offer up some further thoughts on the combined company as well as trigger points to know whether or not the old Perfect technology -- especially the Commerce One pieces of it -- are being put out to pasture or being further nurtured and developed as they should be. I will save additional commentary on CorMine's legacy business model for another discussion in the future. But needless to say, it absolutely warrants further discussion.

As I've talked about on Spend Matters before, Perfect's technology comes from well over a dozen providers if you add them all up (including past Commerce One, Perfect, and eScout acquisitions). Some of this DNA is tied to folks from Vegas who you would not want to meet at 4:00 AM. Different Perfect code comes from some of the best development talent in the world. In other words, what they have to work with is a hodge-podge. And at the old Perfect, they clearly were understaffed from a product development and product management when it came to supporting and further developing what they had acquired.

Hamp Wall, Perfect's new CEO and formerly the top executive and founder of CorMine, assured me that he plans to listen to customers and others in the industry to further service and develop the assets they've acquired -- at least those which are/were not rationalized out of their offerings. But this is easier said than done, given that the old network and supplier enablement business from Commerce One and other acquired businesses took three years to rationalize, while at the same time, Ariba, Ketera, SAP, Oracle, Aravo, and CC-Hubwoo, among others, have had more time to focus on innovation during the same period.

Personally, I'll be looking for a number of things to measure how the new Perfect is living up to its promise to breathe new life into these old solutions. Please note that I could care less about what they do on the e-sourcing front -- at this point, that's a price-sensitive market on the low-end and not one that will make or break Perfect's success unless they decide to move upstream. First, I'm going to look for commitments to innovation and product excellence. We'll be able to measure this from new customer acquisition, analyst rankings and feedback, as well as new product releases and enhancements. Here, I'd like to see Perfect offer value-added services around its network that go beyond just enablement. There's a huge opportunity for them to build out network-based solutions to supply risk management, supplier performance, and payment, just to name a few areas they might consider focusing on.

Second, it will be critical for Perfect to focus seriously on customer service metrics around their technology business. The last Perfect team had been able to right the ship after the previous team's acquisition binge -- which I have described at cocktail parties as the equivalent of drinking copious amounts of alcohol without fully thinking through the hangover consequences the next day -- at least in part based on reference and other discussions I had with their customers. But clearly, there's still a very long way for the new Perfect to go in this regard. When you have so much IP out in the market -- and too few developers and product managers paying attention to it -- it becomes hard to focus on accelerating into the wind when you're constantly struggling just to stay afloat.

Third, I'd like to see some deal synergies between the legacy CorMine business and the old Perfect business in the procure-to-pay and content management spaces from a product perspective, rather than keeping them as two separate businesses which share technology. As anyone who worked on the old Commerce One technology from back-in-the-day will recall, one of the major elements it had going for it in a many-to-many environment was its flexibility and what you could build with it. Here, I'd like to challenge CorMine to continue to think through its integrated supply offerings and come up with something completely new in the market leveraging the underlying technology assets which they now own.

Stay tuned for further updates on the new Perfect in the coming months. I look forward to hearing more from them, as well as talking to their customers. Of all the providers I look at, I reckon these guys -- given the technology and IP assets they have as well as CorMine's services -- will be perhaps one of the most exciting vendors to watch if they can pull things off. That's still a big "if" on the legacy Perfect side of the house, but I'm now willing to give Hamp the benefit of the doubt in the first 12 months following the deal.

Jason Busch

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