Emptoris' recent acquisition of Xcitec (see past coverage here and here) suggests a number of potential competitive implications for the broader procurement and sourcing marketplace. For one, it should up the ante on direct competitors to build out strong functional capability in this area, rather than paying lip service to it (interestingly, Emptoris did have solid supplier performance management capability prior to the acquisition, but lacked robust capability in the broader supplier information management/supply base management arena, despite its solution positioning at the prior time). Spend Matters believes that this acquisition will have a range of competitive implications, including the following:
- Perhaps most important of all, this transaction should force Ariba to make a decision about whether it wants to get serious about the supplier management area, rather than treating it as a secondary solution focus. Just as Emptoris has acquired a company with deep enterprise software experience in this area, it would make sense for Ariba to acquire one with a native cloud focus -- and ideally one with a many-to-many capability and vision (something Emptoris appears to lack with the Xcitec architecture and deployment model, at least to date). Unfortunately, while there are no "Procuri"-like vendors in this market with similar customer traction and growth, several others would be great SaaS/cloud tuck-ins here for Ariba. We might suggest both Aravo and Lavante for a many-to-many model and vision (though Lavante is not focused on all of the nuances of a broader supplier management platform just yet, but rather extending an invoice/audit paradigm into supplier management). Ariba may also consider CVM Solutions and Hiperos as potential targets. Or, of course, they may opt to enhance their own, organic capabilities in the area.
- Other best of breed suite competitors such as BravoSolution, Iasta and Zycus will need to decide how serious they want to get about this area as a result of the acquisition. It is Spend Matters' belief that the competitive suite market will now follow the path of contract management solutions, bifurcating into those who admittedly offer just basic capability -- and toss it in, or charge very little for it -- and those who take the area more seriously with and offer a strong, independent capability that can stand alone.
- SAP will need to decide whether or not to double-down on the development of its Supplier Management capability in its broader Sourcing offering (built on the platform formerly known as Frictionless). While offering solid capability that exceeds that of many suite competitors in its Wave 8 release, the broader message and suite integration that Emptoris is pushing with the acquisition will require greater focus and development if SAP is to compete on a functional playing field with a vendor that has handily beaten them in their own German backyard so far.
- Oracle will remain a dark, mysterious horse in the supplier management race. Possessing a highly unique vendor data management solution with its Supplier Hub product and broader functional capability in Supplier Lifecycle Management that mirrors that of a range of other providers (although with different modular strengths/weaknesses across supplier management areas), Oracle could still play a major role in this market if they get their sales and marketing act together. Unfortunately for customers and Oracle, the vendor is missing out on being invited to the table for what Spend Matters estimates is at least 70% of the deals in the market at this point -- perhaps more. Oracle should react to this acquisition by placing greater emphasis on the marketing of a data-centric vision of supplier management (rather than just workflow, process and functional enablement) as well as continued capability built-out.
- For independent vendors in this area, the transaction and subsequent push by Emptoris into its customer base should help build greater awareness of the need for this class of supplier management solution and could spark buying activity and bake-offs in deal situations. Smaller vendors should make sure they align their marketing stars to make sure they get into resulting RFPs that may ensue by building awareness, and in addition, should have a strong message around integration into broader source-to-pay environments to counter the Emptoris/Xcitec suite integration message.