While it might seem on the surface that IBX and Hubwoo, two companies that have partnered with SAP to host SRM and related procurement products, are following similar strategies, they're actually not. In fact, by looking closely at both providers as well as talking with various SAP representatives over the past couple of months, it's become more and more clear to me that these two different SAP partner organizations in the Spend Management sector are employing divergent strategies in an attempt to target the same market (with some geographic differences, but also with some regional overlap). Granted, to see this requires looking past similarities that appear quite deep from a surface view.
In the case of IBX and Hubwoo, both providers sell hosted versions of the SAP SRM platform (and individually also sell other hosted SAP solutions that include e-sourcing, spend analysis, contract management, etc.) And both provide enabling capabilities around SAP solutions as well. For example, Hubwoo and IBX both offer enhanced content management, supplier enablement and search capabilities that make up for some of the shortcomings of the SAP platform. Moreover, IBX and Hubwoo are on the SAP price sheet as well, meaning that SAP reps are compensated for selling their hosted SAP capabilities. And last, let's not forget how involved SAP appears in the futures of both companies, dedicating significant partner and corporate development expertise -- reminding me of lean supplier development teams -- to fully reap the most from their investment (in the case of Hubwoo, a board member is also an SAP executive).
Given all of these similarities, what are the differences between the two organizations? It's really quite clear -- Hubwoo's success is almost entirely tied to their success supporting the SAP platform. You need only read a few lines of the marketing rhetoric on their site to see this (emphasis added): "With operations internationally, and the first SAP® global BPO partnership dedicated to procurement, Hubwoo provides a fully integrated suite of tools and services, delivered as-a-service to companies. No large upfront capital investments needed. Companies simply pay a subscription fee to use our world-class solutions, powered by SAP® software, giving them a competitive edge with lower total cost of ownership, less risk, faster time to value and an accelerated return on their technology investment."
In contrast, IBX is pursuing a model that embraces the SAP ecosystem, but hedges its bets in considerable ways by taking a technology portfolio approach that combines third-party tools as well as their own (not to mention enabling services, including non-technical operations and sourcing consulting). Originally IBX aligned itself with numerous providers including Commerce One and jCatalog, among others. But it has since rationalized its partner portfolio down (except in the sourcing arena, where it has in fact grown). I recently had the chance to speak to Pontus Björnsson, IBX's SVP of Marketing and Product Management, and he suggested to me that IBX's "partnership strategy is now going away from best of breed and focusing resources on SAP and [our] own development". IBX remains committed to partnering with SAP, working "tightly on the product development side".
In terms of its own organic development, IBX plans to "complement SAP in a number of areas" helping fill the "discrete gaps between strategic and operational processes" when it comes to such areas as "supplier management, usability" and other areas. IBX decided to embrace the internal development approach to solution areas to complement SAP because the integration costs of working with multiple providers -- not to mention the support and product headaches -- no longer made sense. Moreover, developing software has been "less expensive" than in the past. Hubwoo, in contrast, while developing some limited capabilities of its own, would sooner slot-in and attempt to tailor and enhance SAP wherever possible versus considering a true organic development option, except as a last resort. Another area where Hubwoo and IBX differ is that the latter is a proponent of an on-demand approach, but is not just committed to this model (Hubwoo is about as evangelical about on-demand as it comes).
I used to think of Hubwoo and IBX as separated more by geography than by solution and company strategy. But now I see the two as taking different paths, both of which could be quite successful -- and potentially competitive in broader geographies as the two encounter each other more often (e.g., UK, Germany, France). Perhaps the greatest similarity between them is one that customers need not worry about. And that's doubting SAP's commitment to on-demand partners. Unlike their "milk the knowledge and toss out the jug" approach to companies like Commerce One in the past, SAP seems especially committed this time around to tying its success in procurement to that of its partners.