In yesterday's early morning post ( E-Sourcing Evolves: Looking for Differentiation and Getting Past Basic Functional Sameness), I shared a few thoughts about the way I personally see the overall e-sourcing landscape evolving. To paraphrase all 600 or so words of the spend diatribe, this market has generally moved towards overall parity for basic capabilities. Yet if you begin to look around the fringes of sourcing at both functionally related (e.g., supplier management, spend analysis, performance management, quality, etc.) and industry-focused (e.g., manufacturing) areas, there's still significant innovation and differentiation.
One such vendor who has taken a vertically focused approach at sourcing and related areas for manufacturers is Austrian-based Pool4Tool. Pool4Tool initially developed applications focused on basic sourcing and collaboration, but has since expanded its solution portfolio into other areas we'll discuss in our forthcoming analysis. In a series of posts looking at their capabilities, I'll profile how they're succeeding in delivering a new type of manufacturing sourcing value, beating out better known competitors at industrial bellwether companies throughout Europe (and soon, most likely, the US market as well).
I'll begin the series in this installment by providing a bit of background and context on Pool4Tools' history, architecture and go-to-market strategy, and also how they fit into the broader solution and technology-environment landscape. In subsequent follow-ups in the coming weeks, I'll offer an in-depth look at their technology and how their sourcing capabilities are differentiated in the market. To begin, Pool4Tool has quietly built a respectively presence in Europe and is just beginning to ramp its North American efforts. The company has over 50 employees, including 18 focused on software development and another 10 focused on support, testing and related areas. Pool4Tool is closely held by the its founder and general manager, Thomas Dieringer, as well as the firm's employees and a single private investor, and appears on solid financial footing for a company its size.
When we started our conversation, it became clear that the roots of the company are engineering based, in contrast to a number of other sourcing providers over the years that came out of a services or solution orientation. But perhaps most interesting from a development perspective is that the Pool4Tool application is built on, drum roll please, PHP (on top of a broader open source LAMP stack). While I'm not a techie anymore, here at Spend Matters and MetalMiner we're betting our future development of new applications and sites on PHP, and it's still a rarity to find someone who has developed in this language on an enterprise basis. Java and .Net are far more common; and even flex front-ends are becoming more popular these days, not to mention Coupa and others using Ruby on Rails.
But PHP-based enterprise software vendors are few and far between, especially those whose initial code dates back more than a few years. Pool4Tool shared with me that the reason for going with PHP earlier in development and sticking with it to this day is that it's "three times faster to develop and prototype" new capabilities. And it's clear that large European manufacturers are comfortable with using solutions based on PHP, given that 80-85% of the Pool4Tool installed-base are SAP shops -- yet they opted for Pool4Tool over SAP SRM and e-Sourcing, despite the typical SAP-installed base risk aversion to new technologies. Interestingly, one of the reasons for Pool4Tool's success in Germany might be that SAP has historically not sold its stronger E-Sourcing solution in this market as its primary toolset, opting instead to push the sourcing capabilities resident in SRM.
How do Pool4Tools' capabilities across sourcing, supplier relationship management, project management, supplier connectivity and management stack up? Stay tuned for Part 2 of our series as we look further into their solutions and modules.