SAP is also taking back control in other areas where they were previously 100% dependent on partners (but not in the areas Hubwoo focuses on). For example, Bristlecone, which previously had an exclusive relationship on serving as a services partner for SAP Spend Performance Management (i.e., spend analysis) for deals coming through SAP, now faces competition from, surprise, SAP's own Spend Performance Management services group. Even more curious is that Bristlecone, which many would think could easily best SAP on services prices because of a hybrid onshore/offshore approach, is more expensive than the costs SAP is quoting for deploying, including data acquisition, cleansing and classification. Yes, you read that correctly -- SAP is undercutting the costs of its co-development partner for the product in its pricing in at least one situation we're aware of from a Spend Performance Management standpoint.
But Hubwoo, on the other hand, appears to have a much tighter relationship link with SAP. Based on everything we were able to gather, it seems highly unlikely that SAP would opt to compete against Hubwoo in any type of deals in areas which they could, potentially, overlap with future homegrown solutions (e.g., a hosted version of SAP SRM, supplier network, supplier enablement, etc.). In terms of recent activity, Hubwoo shared with Spend Matters that they are currently in deployment with two customers on their multitenant version of SAP SRM 7.0 -- and should have four customers up and running by the second half of the year (and more transitioned over in the coming quarters into 2012 as older customers begin migrations, should they opt to move onto the newer release).
Interestingly, SAP does have a rapid deployment solution (RDS) at a fixed price with a fixed timed commitment for catalog enablement for SRM, but it seems that whenever a company is interested in rapidly bringing on several suppliers, Hubwoo becomes a key partner to lean on by serving as an extension of the SAP team. It also seems, based on some of our discussions, that SAP's strategy to bring Hubwoo and Crossgate together to form a competing network against Ariba from a connectivity, integration and catalog management perspective is generating material interest among other SAP customers. One group of potential users of this solution appear to be current Quadrem customers, which SAP is trying to woo onto their network and defect from Ariba, and were out window shopping at Sapphire.
SAP and Hubwoo still have their work cut out for them in terms of educating the SAP customer base that the hosted/cloud option exists for SRM -- let alone a cloud-based supplier connectivity offering designed to mirror that of competing supplier networks. It's Spend Matters belief that as SAP/Hubwoo continue to ramp up their education efforts in this area, that a critical enabler of new customer deals and overall SAP SRM awareness (both cloud and otherwise) will be the supplier network that everyone was exonerating at the show. The network also might become a stealth means for Hubwoo to get a foot in the door with SAP to up-sell other services and capabilities as well (e.g., supplier enablement, EIPP, catalog management, etc.).
Regardless, the SAP/Hubwoo vibe coming out of Sapphire appears stronger than ever. I do have my questions about how they plan to address some of the areas they're not currently addressing in their joint solutions relative to Ariba (e.g., supplier search, discovery, dynamic/market-based invoice discounting including third-party bidding, etc.) but all signs suggest the relationship between SAP and Hubwoo is as tight as ever, and it's likely we'll see even more new things to come from both parties in a joint manner.