I recently caught up with Emptoris for a spring/summer briefing and update. From the discussion, I'm impressed by the level of transformation in the organization since Patrick Quirk, Emptoris' CEO, took the helm last fall. Emptoris has done a 180-degree turn from its past engineering/innovation-focused. Currently, it's strategy now places the customer -- and their requirements -- at the forefront of everything they do, from solution planning to partnering. This change in philosophy and the level of commitment that Quirk has shown in getting to know existing customers -- which I have gotten feedback on from numerous user and partner sources -- is in marked contrast to Emptoris' largest competitor, Ariba, which seems often to be moving toward a one-sized fits most (if not all) approach with how it goes to market focused on SaaS. Time will tell if this is the right strategy, but for now, judging from recent growth numbers, the investment in customer intimacy and planning appears to be working for Emptoris.
From a partnering perspective, Emptoris continues to win channel-led business over others by working flexibly with partners. Accenture, IBM and Deloitte have each accounted for a number of deals and current pipeline, many of which have been/are quite large in size and scope. New customer wins span multiple sectors, including financial services, retail, transportation, manufacturing and healthcare. Overall, Emptoris grew year-over-year bookings by 24% in Q409 and a remarkable 122% in Q110. In the most recent quarter, sourcing accounted for 42% of bookings, while contract management accounted for 28%, services procurement for 9% and spend analysis for 21%. However, these numbers should only be taken as directionally accurate, because of the prevalence of suite deals and the flexibility Emptoris has in allocating revenue to different products under these scenarios.
What is more interesting than revenue allocation by product is the size of the Q1 bookings increase along with the size of what Emptoris considers to be a substantial new customer deal ($300K+), and what these numbers together represent. Even though Emptoris did not provide an on-the-record comment regarding the breakdown of SaaS / non-SaaS revenue, it would appear that they're booking a large number of CD deals in contrast to Ariba and others in the sector, based on their numbers. A prevalence of large enterprise license deals would explain the boom in Q1 revenue, which would be virtually impossible to obtain given SaaS revenue recognition rules.
In terms of product innovation, even though Emptoris did not share a product update in their recent briefing (preferring to address the topic of solution innovation later in the year), I know that they've been painting a vision with customers about the future of services procurement integration with the rest of the Emptoris suite (especially contract management and spend visibility). I suspect there will be quite a bit of news on the services procurement and broader suite integration front out of Emptoris later this year. I will also find it interesting to observe if Emptoris' lack of a cloud or networked buyer/supplier solution vision will be a growth hindrance or not relative to Ariba as the year unfolds.
Stay tuned for further Emptoris coverage this week and next.
- Jason Busch