Earlier this week, Hubwoo and Microsoft announced a partnership designed to add additional procurement and e-invoicing / AP capability on top of the Microsoft Dynamics ERP solution set by integrating Dynamics’ customers to the Hubwoo Business Network. On the surface, the initial phase of the partnership is targeted at enabling Microsoft Dynamics AX users (the segment of the Dynamics customer base oriented to larger enterprises – typically greater than $400M in revenues) to use the Hubwoo network to take advantage of its P2P transactional services. These include content/catalog management and PO exchange on the buy-side – as well as supplier enablement and e-invoicing integration on the sell-side.
But our initial take is that underneath the surface the deal appears to provide a somewhat stealth means of closing procurement and P2P gaps in the Dynamics solution set (regardless of the network positioning). The solution should help give Microsoft a leg up on other middle-market ERP players that lack a comprehensive indirect procurement capability (including catalog management and supplier connectivity / enablement).
It’s equally as important that if Microsoft and its value added resellers (VARs) truly get behind the deal with strong marketing support, it could be very significant for Hubwoo and Microsoft customers combined, potentially offering a substitute approach for Dynamics users to avoid implementing a separate third-party P2P solution such as Coupa, Ariba, SciQuest, Verian, Basware, GEP and others. It’s also obviously important for Hubwoo to align itself with large application providers as “on-ramps” to the Hubwoo network given SAP’s recent acquisition of Ariba.
Reading through the press release lines on this one is not easy for those outside of the sector. But in today’s supplier network/connectivity environment, where transactional capability and routing occurs (and even shopping/requisitioning/workflow exists) in the cloud can have blurry lines as supplier/business network and app-based cloud solutions can contain overlapping capabilities.
We’ll offer more detailed analyses of the news on Spend Matters and Spend Matters PRO once we’ve had the chance to talk to more folks involved in the relationship and explore the Dynamics strategy in greater detail with the Microsoft team. But in the meantime, here are some additional summary snippets and positioning elements to consider:
- The stated goal of the partnership is to offer a “step change in spend compliance and accounts payable automation” for Microsoft Dynamics customers according to the announcement
- For Hubwoo, the partnership could bring significant additional volume and traction onto its network, providing further enticement to suppliers participating to sign-up for additional fee-based services (note, suppliers do not pay fees for transactional connectivity on the Hubwoo network)
- The initial phase of the partnership “ is focused on customer savings in spend compliance and accounts payable business processes” while “Phase II will address additional processes such as customer relationship management and accounts receivable automation among others”
- Hubwoo will start to enable larger AX customers in the initial phases of the partnership, but in the future, this could also include smaller Dynamics enterprises (on both the sales/receivables side and the procurement/AP side)
- “Hubwoo will develop adapters that will allow Microsoft Dynamics AX customers to connect their accounts payable, procurement, customer relationship management, and accounts receivable processes”
More broadly speaking, where does this leave Hubwoo? The company is telling the media and analysts that it will continue to support “its existing customers on SAP platforms and recently renewed its SAP BPO agreement to continue to sell and support SAP applications” and that the Hubwoo “network continues to have certified integration to SAP systems.” However, owing to the Ariba acquisition, “Hubwoo and SAP have no go-to-market partnership around networks.”
Stay tuned as our coverage and analysis continues.