As many Spend Matters readers know, I sit in a somewhat unique position in the market. On average, I probably talk or correspond with twenty vendors, practitioners, consultants and analysts on a daily basis (sometimes in that order, but not necessarily). This gives me enough insight into deal flow in the Spend Management world to be dangerous -- and just maybe even right when it comes to predicting who is winning deals (or at least getting in them). This month, I'd like to inaugurate a new series that I'll revisit every so often that talks about dealflow -- who is getting in deals (and what kind) and who is not.
While I might touch on services deals in the future, I'll constrain my comments in this posting to the technology providers. Let's walk through the various solution areas in the Spend Management technology landscape while I share some current anecdotes. Today, I'll start with dealflow within what I describe as the procure-to-pay market (which encompasses eProcurement, supplier networks, and electronic invoice presentment and payment or EIPP). While my commentary is nothing more than non-scientific speculation, it is US-centric (and perhaps globally informed) from my seat in the marketplace.
When it comes to the procure-to-pay deal world, it would be hard to start off without talking about the big unknown in the sector which has hundreds of companies scratching their heads. And that is SAP -- specifically the SRM 7.0 release. Many companies are taking a wait-and-see approach, waiting on 7.0 to exit ramp-up sometime in 2009. Others are upgrading to 5.0. Regardless there does seem to be a trend that SAP shops (even non-SRM SAP shops) have accepted that they will inevitably migrate to SAP. But in the meantime, Ariba appears to be at least getting to the table in a number of on-demand deals. Oracle is simply not as large a player in the market from a discussion perspective compared with SAP, although they are getting deals in Oracle shops (which should be expected). Their latest release, in fact, has much more of a consumer look/feel than the currently released capabilities of their major competitor across the Atlantic and should demo quite well in Oracle shops. I also find it interesting that Vinimaya, who positions their capabilities as "supplier network 2.0" has had significant traction in the Oracle installed base, among others. Given this, I would reckon that Oracle procure-to-pay customers are actually seeing higher levels of spend under management and more suppliers enabled than the average SAP SRM shop.
What about the rest of the market? Coupa is getting a handful of medium-sized opportunities as well (including at least one that is significantly larger than their target SMB market). The quiet spoiler in the space is probably Hubwoo -- an SAP partner -- that is also benefiting from the uncertainty around the 7.0 product release and the failure to go G/A with 6.0. Perfect appears to have had some wins, but I probably see their name emerge in fewer than 5% of the deals that I'm privy too. Ketera has been somewhat quiet in the procure-to-pay space from a new deal-flow perspective but I would not count them out by any stretch.
From a downstream transaction clearing and management (i.e., supplier network) and EIPP perspective, the canvas is relatively simple to paint. Ariba is probably seeing more traction than anyone else from a supplier network perspective, yet Hubwoo is also coming up as a name that SAP customers are at least considering. Few companies or consultants that I speak with even think that Perfect is still an option here (it is). If we turn our attention to EIPP for a minute, Ariba is probably the dominant name in the US at this point as well, though Chase (Xign) and Amex (Harbor) are getting into their share of deals almost by default on the strength of their acquired products (it’s certainly not their marketing or sales savvy, I'll tell you that). BasWare has entered the North American market but is not well known here yet and is not in the broader EIPP (outside of just e-invoicing where they are popping up in some situations) dealflow like the others -- at least not yet. Though I suspect this will change.
Last, what of the marketplaces and exchanges (e.g., Exostar, Quadrem)? They are simply a non-factor in most new deals that I see. They might have more than sufficient capability to sell in a broader market, but appear to be mostly marketing to their installed base and original investors from a procure-to-pay perspective.
- Jason Busch