A Few Additional Thoughts on the Emptoris/Ariba Patent Settlement

As I've hinted at in previous posts on the subject, I believe the only clear winner in most litigation cases are lawyers. Clearly, in this settlement, Ariba also succeeded at damaging Emptoris' balance sheet, not to mention gaining the clear FUD advantage in deals against both Emptoris and other competitors who they can now claim to be threatening action against. But beyond this, what will the implications of the ruling be and what are my final thoughts on it? I'll try to quickly summarize them below.

To begin, and perhaps most important, if you are an Emptoris customer, go back and re-read your contract clause around IP indemnification and related technology clauses. Not all contract language is created equal -- especially depending on whose paper it's actually on. Chances are, you'll be satisfied with the Emptoris patch / work-around (which I hope to look at in the next day or so). But regardless, know where you stand and what your rights are in this area.

As important, don't believe the marketing hype for a minute that Emptoris is doomed (a word I've heard thrown around already by a competitor) as a result of this settlement. As I said in my initial post on the subject last week, Emptoris will more than survive this ruling and judgment. They continue to have a solid offering in the spend visibility area and market-leading -- or close-to-market leading -- capability in procurement, sell-side and legal contract management (see below for my take on where they stack up in sourcing). And they will somehow swing the financing to rebuild their balance sheet if necessary. After all, do you really think their investors are going to walk away?

From a sourcing perspective, Emptoris has always been a matter of personal preference. But this solution will still remain at the top of most company's short lists. Are there more powerful optimization solutions on the market? Yes, despite the marketing hype over a well-lobbied-for prize in the area. Both Combinenet and Trade Extensions offer more flexible and powerful capabilities when it comes to optimization. Are there more intuitive interfaces than what Emptoris offers for soucing? I'd argue yes, but that's a personal judgment call. Still, overall, Emptoris delivers a top-notch sourcing package that is suitable for the great majority of a company’s spend. If you're debating going with a best-of-breed solution in the sourcing area, you would be negligent to not keep Emptoris at the top of your list. And I've not even begun to mention Emptoris capabilities in the supplier performance sector which also place them at the top of the market.

As a last note in this case, someone mentioned to me last week that some numbers surfaced in the filings that might be of personal interest to Spend Matters readers curious about the actual size of Emptoris. I won't repeat them here because I don't want to beat on horse that's already suffered its most difficult week in recent memory, but if you're curious to understand a bit more about the size and historical context of Emptoris' financial picture, some of these are now apparently available for public consumption.

Enough from me on the subject. Let's get back to some real business.

Jason Busch

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