In the first post in this series, we offered a summer update on Zycus, a provider that is increasingly penetrating the broader Spend Management sector with new solutions in sourcing and contract management (and planned releases in a range of other modular areas). In this second installment, we'll provide some commentary beyond the numbers and trends we shared in the first post. To begin, it's quite clear that Zycus is headed down a similar road as Emptoris, in wanting to serve the global market in spend, sourcing and related areas. In contrast to Ariba, which is not showing up as much in Asia these days, Zycus is mirroring Emptoris' strategy in wanting to serve large companies on a global basis, even if they're based out of developing markets. However, their solution approach could not be more different than Emptoris from a sourcing perspective.
In contrast to Emptoris, which continues to win most of the head-to-head, check-the-box functional comparisons that go to RFP these days where they're invited -- at least the ones that I see where price is not the first concern -- Zycus is still behind the eight ball in some functional areas (e.g., optimization, nuances of RFP, project, user management, etc.). Still, they are beating Emptoris in some head-to-head deals. This begs the simple question: how? The answer is as simple as the Zycus sourcing and contracts UI is to use. Thanks to an overall user experience that is among the strongest in the market, some organizations are prioritizing functional use and simplicity over configurable depth, solution breadth and absolute functional capability.
Our own experience and customer discussion suggests that Zycus is serious about transforming the overall usability quotient of sourcing and related toolsets. At the same time, they've also invested in the ability to deliver relative low-cost but complete sourcing services via an offshore model, an appealing combination for organizations that either don't have established consulting relationships (or budgets) or simply want to be choosier than in the past with à la carte service selection. Based on the information Zycus shared and our own view of recent deals in the market, it would appear that a significant percentage of customers opting for Zycus' sourcing tools are also engaging Zycus for services too. Their go-to-market approach in this regard appears to be more similar to Ariba, which has traditionally "owned" services relationships as well, than Emptoris.
While sourcing services capability and flexibility is no doubt playing a role in helping Zycus win its share of deals, they're also doing a better job at marketing themselves than in the past. It's our view that Zycus is bringing a level of polish and sophistication to its entire company, product and solution material -- from presentations to demonstrations -- that is making Western prospects feel more comfortable about doing business with a vendor that's based offshore. In fact, Zycus demonstrates their solutions -- especially on an integrated basis -- from a position of strength relative to many of their competitors, including best-of-breed and ERP-based competitors.
Clearly, this integrated demonstration approach is where they're headed as a company as well. I highly suspect we'll see additional new areas of focus and solution interest in the coming quarters. On the call, Zycus hinted that they were quite interested to extend their capabilities within sourcing into the supplier performance management space, seeing significant opportunity in this segment of the market. How quickly will these -- and other -- potential new solution areas follow their relatively recent sourcing and contract product launches? Perhaps sooner than you might think given their overall R&D push (and the size of their R&D team), a commitment to developing on a single platform going forward and the directions their customers are taking them in.
Stay tuned for further analysis of how Zycus is performing in the market in the final post in this series.