Catching up With Emptoris (Part 1)

Last week, I had the chance to catch up with Ammiel Kamon and Kevin Potts from Emptoris to cover a range of topics from new customer wins to hot customer areas of interest and general buying trends in the market. In today's post, I'll share a few general observations from our conference call. Later this week, I'll provide some specifics about Emptoris' traction and where they see the market going.

I was pleasantly surprised from the start at one data point that stood out because (unfortunately) it is not yet a trend: A new Emptoris customer licensed supplier performance management as an initial product. Not spend visibility. Not sourcing or contracts. That's right -- supplier performance. Perhaps this is an early indicator that practitioners are getting more serious about proactively reducing supply risk and improving supplier quality and on-time performance. We'll see, but at least this is one data point to suggest that supplier performance is finally gaining traction as a stand-alone market. It's about time.

One of Emptoris' clear strengths in the market has been its contract management capability since the diCarta acquisition. They continue to gain significant numbers of new customers in this area. Interestingly, roughly 40% of these deals continue to be installed/CD software type arrangements. This number is significantly higher than the other areas Emptoris targets. For example, Emptoris estimates that over 90% of spend analysis deals and 90% of sourcing deals follow on-demand/SaaS models. The numbers for all three of these product areas are in-line with similar estimates that I've gotten from Ariba and others -- suggesting that the complexity and data security concerns for contract management make them an anomaly in a market which is clearly trending down a SaaS dominant route.

Emptoris has continued to do well by its channels in 2008, including Accenture. With Accenture, these deals include both procurement outsourcing arrangements and more traditional channel-type introductions/engagements. In contrast to its largest best of breed competitor (Ariba), Emptoris has been able to continually exploit traditional Big 5/large SI channel relationships while its Sunnyvale nemesis is being forced to get more creative on the indirect sales front -- working with some large SIs (e.g., Deloitte) but focusing more of its channel efforts on smaller VARs and larger financial services institutions. This move has grown out of necessity as Emptoris has managed to embed itself within Accenture, among other larger SIs and outsourced providers, in the past couple of years.

Stay tuned for further analysis on Emptoris later this week.

- Jason Busch

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