In the first two posts in this series (Post 1 and Post 2), I provided some background on Zycus' recent market and solution developments. In this final post, I'll offer up a perspective on how I see Zycus fitting into the market going forward. I recently caught up with a friend in the industry who works for another software vendor in the sector, and he asked me where I saw Zycus headed. I told him that Zycus' vision is probably more closely aligned with Ariba than anyone else. It appears they not only want to be a strong top three player in the spend analysis, sourcing, performance management, contracts market (by our estimates, they're probably fourth today overall if you take away the P2P sector behind Ariba, Emptoris and BravoSolution) but also the P2P sector as well, where they have not introduced a solution yet. They're also taking what appears to be an organic development route to get there, leveraging the B2eMarkets core architecture that they acquired from VerticalNet years back (in a similar way to how SAP is leveraging the Frictionless platform from which to build a range of solutions).
Given this development path, I suspect we'll see Zycus come to market with a fully integrated, single-platform solution sometime in the next 18-24 months (including spend classification and analysis) -- perhaps sooner. Today, many of Zycus' competitors quietly leverage multiple platforms (despite sharing similar user interfaces), so they're not behind the competitive game by much here, if at all. But if and when Zycus can build an integrated spend-to-source-to-pay solution, they'll be the first non-ERP company to give Ariba a run for its integrated Spend Management suite money. Moreover, the comparison to Ariba continues if you consider Zycus' view on owning services relationships as well. In this regard, it's clear that Zycus wants to be able to provide a range of supplier identification, category strategy / management, category sourcing and related supplier / supply and markets / category intelligence capabilities and services as well, without having to direct customers to work with SI and consulting partners.
Zycus will need to get to a new level of sophistication when it comes to sourcing optimization -- including releasing software capabilities in this area -- to compete head-on with folks like BravoSolution, CombineNet, Iasta and Trade Extensions (not to mention Emptoris, which has limited services capabilities today and enables a variety of partners as well). But I suspect this will be a relatively quick and forthcoming move, given Zycus' quick development cycle times. Such a move will further enable Zycus to compete on a complete solutions package including software, services and enablement, a combination that is especially important as you get into smaller Global 2000 organizations.
To get back to my colleague's original question about where I see Zycus in the market going forward, I continue to think that they'll eventually become a global "shortlist" player, similar to Ariba and Emptoris. In other words, they'll be on the shortlist of most companies going to competitive tender for sourcing and related toolsets (let alone spend analysis, an area where Zycus has a seat at the table in a majority of competitive deals). Whether they become a competitor that looks more like Ariba, however, will depend largely on their development plans in the transactional and payment areas. Some question whether this is still a viable market given its relative maturity and the rise of ERP capabilities. I personally think it is, especially given SciQuest's and Coupa's success and traction in recent quarters, which makes it clear to me that there's room for best of breed providers to compete against ERP and Ariba.
Moreover, I suspect when Zycus sees first hand how its competition is partnering more with Coupa, SciQuest and potentially others to align against Ariba -- as they are today -- it will encourage them to come up with their response even more quickly. And if they do, we could very well see the second non-ERP player in the market with a complete Spend Management footprint, potentially with an end-to-end capability on a single platform.