Last fall, Thomas Kase and I attended Zycus' analyst event in Boston, which consisted of a full-day set of demonstrations, briefings and interactions with senior members of the Zycus team and customers. One of the impressions that Zycus wanted to leave on the attendees was that it had significantly broader suite ambitions on its mind, including near-term objectives to capture material market-share extending far beyond spend analysis. This vision, they shared, would encompass sourcing, contract management, supplier management, total cost management and beyond. With the stated goal of being seen as a "strong number two" contender in the market relative to Ariba considering reputation and market share, Zycus shared an ambitious set of solution and customer goals that it hopes will catapult its way past others in the market.
Earlier in February, Zycus publicly announced many of the solution enhancements and extensions it had previewed on its analyst day to industry observers. In the press release, Zycus formally introduced a number of new modules and enhancements including iMine ("for automated visibility into performance improvement opportunities"), iManage ("for end-to-end category and sourcing project management visibility"), iCost (total cost management) and iOptimize (sourcing optimization). Zycus also announced a number of enhancements to its spend analysis capability, plus a new set of modules specifically targeted at bridging the identified and implemented savings gap between finance and procurement. This last new capability, iSave, takes some of the concepts introduced by specialist vendors like Sievo and integrates core savings tracking and management capabilities with a broader spend, sourcing and supplier management suite.
With these new product introductions and enhancement, it's clear that Zycus is playing for keeps in the spend management market. In a series of posts looking at the latest from Zycus and its current competitive position in the market, we'll aim to achieve a balanced perspective on helping organizations considering Zycus and others across the solution spectrum in what now amounts to coverage spanning nearly all procurement-related technology areas (aside from P2P). In considering Zycus' general growth and evolution in recent years, we've been amazed at their rate of progress with new solution introductions and the critical importance of this solution momentum not just to company growth, but also defending original core spend analysis territory -- where many new competitors have been eating into an increasing share of the pie.
While Zycus can now compete effectively against Ariba, SAP, Oracle and others in new product areas, so can its competitors in the one area that it originally dominated, but is now a single -- albeit larger -- player in a much more complicated and distributed market: spend analysis. Moreover, the success that Zycus originally had in pursuing proof-of-concept deployments as a means of proving its merits in the sales process for spend analysis has been emulated by others and even in certain sales situations, improved upon from intelligence we've gathered in recent competitive situations where Zycus has not taken the prize (in their defense, Zycus can point to numerous spend analysis "wins" as well).
Still, it's clear this aggressive suite expansion with integrated modules and capabilities is not coming a moment too soon for Zycus given its grand ambitions to be the "best market alternative to Ariba" by 2013-2014 "across the entire procurement solution set and across the globe" as it told us. While these are fighting words for a vendor currently much smaller than Ariba, some of the assumptions that Zycus factors in suggests it has learned from past software history lessons and general customer adoption trends in procurement.
For example, Zycus believes that customers are most interested in buying suites as the market becomes more mature. In their words, "single product players are shooting stars" and have a "shorter life." No doubt this thinking has caused Zycus to back away from leading with spend analysis positioning. Moreover, as Zycus suggests, "customers see through symbolic suite players," i.e., vendors having a single stronger product and other weaker other products "just as fillers."
Yet building a suite that will be competitive across the board is no easy task. Zycus' target, Ariba, knows full well its own solution gaps outside the P2P space, which it has been unable to competitively fill despite many years of watching the spend analysis, sourcing, supplier management and related markets move forward at a rate faster than it can innovate internally.
Stay tuned as we begin to dig into some of the core solution areas that Zycus is staking its broader suite ambitions on. We'll spend much of our forthcoming analysis digging into their sourcing and related capabilities.