Provade Announces Corporate Realignment to Break Free and Rise into The Cloud

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VMS solution Provade, a subsidiary of Pinnacle Group since 2011, announced this week that it is "realigning its corporate structure and technology to add a true cloud vendor management systems (VMS) experience to its portfolio.” Though it is not stated explicitly in the press release, it appears that the realignment is effectively a spin-off of Provade from Pinnacle Group into a newly created company, Provade Cloudware Inc. Provade’s new parent company “will add key outside investors and personnel in the next several months to drive growth of its new cloud direction.”  

Provade’s Latest Reincarnation

Provade was founded in 2002 and raised more than $18 million in venture capital from 2006 to 2010, the year before it was acquired by Pinnacle. Over the years Provade was notable for its close relationship with Oracle: Provade was developed within the Oracle Enterprise Architecture as a multi-tenant SaaS solution and relied heavily on Oracle as a channel sale partner.

Now it appears Provade is entering another stage of development.

The mission of Provade Cloudware Inc., according to the press release, is to create “a true cloud VMS,” leveraging “emerging cloud technology platforms and business applications with emphasis on the Oracle Cloud ecosystem.” It appears that as Provade rises into the cloud, it will remain tethered to its Oracle moorings--at least some degree.

“This restructuring establishes Provade’s technological direction and transformation for the future,” Provade Cloudware President and CEO Hans Bukow said in the announcement. “Provade’s Cloud VMS will be inherently cloud and mobile thus giving customers the ability to more efficiently and economically flex the scale and skills of their just-in-time workforce. New Cloud VMS technology will seamlessly provide improved access to talent through a more powerful flexible workforce supply chain platform.”

Does Provade Have Good Karma?

Provade’s major move comes at a time when cloud technology has become widely accepted by businesses and is rapidly becoming table stakes for VMS solution providers to compete for new business. But taking this next step will be a multi-year project and require substantial new investment, for which — as noted above — Provade Cloudware is expected to become the receptacle. Pinnacle Group’s current equity share in the new company was not disclosed, but it would likely be close to 100% at this time. Going forward, it will be interesting to see who the new investors backing the venture will be and with what level of investment.  

Provade has a very small slice of market share in a space dominated by four VMS players that are already progressing with their architecture modernization and have access to substantial funding sources (most of all Fieldglass, now a subsidiary of SAP). It seems like the odds of being successful may not be in Provade Cloudware’s favor, unless there is a slingshot or some other trick up someone’s sleeve. David takes down Goliath? I don’t think so. But what if David had Goliath (uh, Larry Ellison) in his corner, girded to do battle with the SAP leviathan in the cloud?  

Another trick? The new corporate structure — with the old Provade neatly tucked under Provade Cloudware — suggests Provade’s cloud VMS is likely to take shape as a new (potentially spinable) operating unit under Provade Cloudware.

The future is yet unwritten, but we have been writing about our likely reaching a point in the VMS space when 10-year ROI and technology cycles have run their course, the race to the cloud and the embrace of other technologies proceeds and reshapes the long-time static VMS industry landscape. For more on this, check out our recent article “VMS is Dead, Long Live VMS! Why VMS is More Important Than Ever.”

Please follow Andrew Karpie on Twitter @andrewkarpie. Read more of our contingent workforce and services procurement coverage.

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