SciQuest Reverses Course – Taking Rising Stock of the “Anti-Coupa”


We’re looking forward to getting a briefing, demonstration and related update from SciQuest on its latest 15.3 release in December. Throughout 2015, the vendor has been able to cram a significant amount of contract management, supplier management and sourcing product IP from acquired assets into a common purchase-to-pay (P2P) platform stack.

This now unites deep functional “upstream” and “downstream” capabilities on a single data model, an approach that brings greater consistency than almost any other provider in terms of modular depth, albeit with some elements to still build out in 2016 based on the IP of acquired assets. And let’s not forget the analytics wrapper around SciQuest, which can also stand alone. (The vendor acquired one of the best spend analytics providers in the market.)

In short, SciQuest is looking more like the “anti-Coupa,” a procurement suite provider with capability and strengths that are approaching the market from the exact opposite perspective — significant depth of non-P2P capabilities and a focus on enabling highly complex buy configurations — of the fastest growing suite vendor today.

Taking Stock

Our research team believes the company’s latest release is likely to give SciQuest a boost going into 2016, as it looks to expand its suite presence outside the vertical sectors it has historically focused on such as life sciences, higher education and government. On the other hand, shareholders are finally giving the provider a second look based on recent earnings results.

In its most recent quarter, SciQuest reported non-GAAP revenue of $26.3 million, compared with $25.9 million during the same period a year earlier. That just topped the $26.08 million in revenue estimated by analysts in a Bloomberg survey. SciQuest added 15 new customers during the quarter, including the state of Utah, Rutgers University, Schnitzer Steel and Sonoco.

But procurement organizations aren’t investors. It’s the customers they care about. However, seeing another vendor besides Coupa generate interest from Wall Street is a good thing for everyone in procurement, as it will lead to increased investments by venture and private equity firms in younger providers, which will drive sector innovation.

Yet getting back to SciQuest’s solutions, with highly configurable and increasingly deep functional capability in contract management, supplier management and sourcing capability now joined at the hip with P2P, the vendor will provide increased choice for procurement organizations that like to configure the heck out of an end-to-end solution rather than those likely to prioritize the end-user experience, interface and the “80% solution” from a configurability perspective for capturing spend.

Manufacturing Beckons

Given this and also considering the interest we are starting to see pick up in direct procurement and supplier management — not to mention supplier enablement and connectivity SciQuest bundles into deals for free — Spend Matters believes SciQuest’s capabilities are likely to be a good fit for manufacturers that are going to market for new or replacement solutions, a sector that the vendor has only previously sold to on an ad hoc versus targeted basis.

No doubt 2016 will be a critical year for SciQuest, as it attempts to build critical mass in new markets while perhaps quietly branding itself as the go-to “anti-Coupa” provider for those that want to embrace complex environments and complex non-P2P requirements that are fully integrated with transactional purchasing. We believe the manufacturing sector beckons, among others. But regardless, it will be fascinating to see SciQuest go head-to-head against SAP/Ariba, Ivalua, BuyerQuest and others that are perhaps best known for being able to embrace procurement complexity.

Stay tuned as our product-level coverage of SciQuest ramps up in December and January after we’ve had a chance to play around with the latest.  

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