This is the second in a multi-part series on Spend Matters Plus. Read Part 1 here.
As our exploration of Ariba’s extensive and deep patents continues, we turn our attention to three specific patents tied to sourcing and eProcurement. Ariba’s stash covers a broad range – and a good deal of provider companies in the market can't avoid being in violation. That said, to us, many patents appear to cover either features used prior to the filing date – prior art, as the legal term goes – or be overly broad or otherwise fairly trivial. However, if and when Ariba decides to release their legal hounds, a good number of companies will likely be dragged in. Some providers might have struck licensing deals, and for those with IP portfolios of their own there is always a mutual cross-licensing arrangement to be made. In this Spend Matters Plus research brief, Thomas Kase, VP of research, discusses the following Ariba patents: auction bid and visibility restrictions; eProcurement (“figuring out if your supplier is on the Internet”); and supplier connectivity.more ▸
Transparency has always been an issue in IT sourcing. Not only is there no “Kelley Blue Book” for pricing, the degree of detail provided in one customer’s agreement terms compared to the next (even with the same vendor) is often inconsistent. Let’s take VMware for example. Many IT buyers don’t take into account the extent of detail that VMware or its resellers can or will furnish in quotes and contracts. Some wonder if they’re getting enough detail but have little understanding of what a healthy amount of detail looks like. Lately, we’ve seen several common “transparency pitfalls” in enterprise VMware purchases. Here are a few ideas to guide you through your next VMware transaction.more ▸
Intellectual property rights and patents are big business. And they are, of course, also competitive tools for companies. Witness how many years ago Ariba derailed Emptoris – now part of IBM – as a competitor for a number of quarters and forced a sale of the company based on a patent dispute. But the patent is more than just a tool for vendors to bash competing vendors. They are sometimes open to legal disputes. To the average consumer, the recent Apple vs. Samsung lawsuit over cell phone design and operating system features is probably the most widely recognized legal mess. In May, an Oracle vs. Google dispute concluded with a win for Oracle, with award amounts unspecified (Oracle originally wanted $6 billion).
Patents are powerful tools in the procurement solution software market as well, not just for warding off competitors, but even for generating considerable “income” for the successful parties when push comes to shove. Within the procurement sector, Ariba has amassed an incredibly impressive array of patents (if measured by the yardstick, at least), covering what some might construe as many of the basic elements of the source-to-pay process, including supplier connectivity and collaboration. In Part 1 of this Spend Matters Plus research series, Thomas Kase (VP of Research) provides context for past patent litigation in the sector and begins to cover a number of Ariba’s patents that could affect competitors and customers of competitors down the line. This analysis will attempt to get beyond the legalese with layman’s interpretations of each patent.
Today’s research brief looks at the following three Ariba patents: “supplier/buyer network that provides catalog updates,” “system and method for conducting electronic auctions with multi-parameter optimal bidding,” and “maintenance of a company profile of a company associated with a supplier/buyer commerce network.” If this is a topic of interest to you and you're not a Spend Matters Plus subscriber, contact us to inquire about a free trial.more ▸
Earlier today, GTCR and Opus Global Holdings collectively announced they had acquired Hiperos, the supplier (and other third-party) management vendor. Hiperos is originally a supplier performance management (SPM) focused provider from Southborough, Mass. It has since expanded to deliver a broad range of third-party data collection and supplier lifecycle management solutions – and will now operate as a business unit under Opus Global. Opus Global in turn is a JV between GTCR (a private equity firm from Chicago) and Doug Bergeron. Bergeron was until 2013 the CEO of VeriFone and is now the CEO of Opus Global. GTCR and Bergeron go back to VeriFone – which Bergeron (together with another investor) had bought from HP for pennies on the dollar ($50 million for an asset which HP has paid $1.3 billion). When Bergeron resigned after 12 years as CEO, the company had a market valuation of $3.5 billion. (We thought Bergeron’s long-term ownership and patient growth focus background is important to note.) Note also that Bergeron’s background is from the financial services industry – where Hiperos has a strong presence. In this Spend Matters PRO analysis, VP of Research Thomas Kase and Managing Director Jason Busch take a closer look at Hiperos (including a detailed SWOT analysis), private equity/buyout implications, the prospects for the supplier and third-party management market, and what the acquisition means for customers, prospects, and competitors.more ▸
BPM stands for Business Process Management. If the business process is procurement (i.e., a collection of processes), then the concept is about managing procurement processes – including process design/definition, performance management (e.g., process outputs/KPIs, monitoring), and resource management. Of course, in the IT world, BPM has its own body of knowledge regarding the topic, focused mostly on “process workflow/integration on steroids.” This is the “system of process/interaction/engagement” that may sit on top of multiple systems of record (e.g., ERP, source-to-pay suites). But how can you approach this topic without your eyes glazing over? In this Spend Matters PRO research brief, Chief Research Officer Pierre Mitchell and Managing Director Jason Busch define BPM components and offer up practical ways to apply BPM to procurement, keeping the topic on a business level and issuing both warnings and best practice tips for companies deploying or considering BPM technology adoption within the function.more ▸
This is the second in a two-part Spend Matters Plus series by analyst Thomas Kase. Recently we wrote about the business case for building a suite offering, a topic that sprung out of the Selectica/Iasta deal. The case for suites – and the case against, mind you – is an important one to flesh out. So continuing this line of thought, how does supplier management fit in with the suite vs. non-suite concept?
What are the benefits from having SLM integrated with a suite (comprising sourcing, P2P, contract management, etc.), as opposed to running SLM as a stand alone – perhaps from someone like Aravo, CVM/Kroll, HICX, Hiperos, just to mention a few of the more well-known point providers? When does it make sense to make do with a less capable in-suite SLM solution versus investing in a best-of-breed point solution with greater capabilities? What are the single data model/platform integration advantages?more ▸
Recently we wrote about the business case for building a suite offering, a topic that sprung out of the Selectica/Iasta deal. The case for suites – and the case against, mind you – is an important one to flesh out. So continuing this line of thought, how does supplier management fit in with the suite vs. non-suite concept?
What are the benefits from having SLM integrated with a suite (comprising sourcing, P2P, contract management, etc.), as opposed to running SLM as a stand alone – perhaps from someone like Aravo, CVM/Kroll, HICX, Hiperos, just to mention a few of the more well-known point providers? When does it make sense to make do with a less capable in-suite SLM solution versus investing in a best-of-breed point solution with greater capabilities? What are the single data model/platform integration advantages? These are the core questions that analyst Thomas Kase addresses in this Spend Matters Plus two-part series. This is Part 1.more ▸
Earlier this spring, Coupa provided a briefing and demonstrated a version of its latest inventory module to Spend Matters. Coupa sells its inventory module as an add-on to core procurement but separately from accounts payable, contracts management, and other suite components. But the question remains: in its initial release, does it provide enough value to justify the added cost and modular expansion for companies using other Coupa suite components?
After seeing it, Chief Research Officer Pierre Mitchell and Managing Director Jason Busch argue in this Spend Matters PRO research brief that Coupa’s new inventory management capabilities are likely to bring the company closer to marginalizing the expansion of an ERP value proposition in middle market deployments (but not necessarily a fit with larger customers who are likely to have more sophisticated processes than the tool can handle – let alone inventory management systems already in place).more ▸
In a recent Spend Matters PRO report, Selectica and Iasta -- Mapping the Future of Procurement, Contract Management, and Customer Engagement, Pierre Mitchell and Jason Busch examined and fleshed out a number of scenarios for how companies could use contract lifecycle management (CLM) in new ways in the future as technology capabilities advance. From exploring the linkage of supplier management, corporate social responsibility (CSR) and governance risk and compliance (GRC) more closely to contract management to enabling purchasing contracts that are triggered contingently on a sell-side contract that align risk and profit, the brief suggests a future in which contract management becomes as essential to procurement and sourcing – let alone the broader business – and category management are today. But what will the underlying technology capabilities look like (beyond the basics) to enable these capabilities? In this Spend Matters PRO analysis, Thomas Kase and Jason Busch provide a perspective on contract lifecycle management (CLM) building blocks.more ▸
One could look at SAP and OpenText and see a collision course about to happen. OpenText, with GXS, is expanding an applications and network business largely built on/off of production and direct materials connectivity, expanding far outside of the world of EDI where it started. And SAP, with the Ariba Network, is building an all-encompassing vision that, at some point, will incorporate a broader set of direct materials collaboration and connectivity capabilities. Put simply: the network, application, and infrastructure vision for both firms are converging. Yet OpenText and SAP, still appear to be the best of friends. At OpenText’s analyst day, Patricia Nagle (VP Global Strategic Alliance Ecosystem at OpenText) and Tom Roberts (Global Vice President, Third Party Software & Technology Solutions at SAP Ecosystems) took the stage together. Nagle described SAP as the “most strategic partner of OpenText” and noted that OpenText has 14 solutions sold within the SAP ecosystem.more ▸
We’ve always found the subject of valuation for technology companies a curious topic, one that we could probably bore too many people with during cocktail hour conversations. Last fall, we wrote about the topic of valuation in the Spend Matters PRO brief Procurement Vendor Valuation, M&A, and IPOs: Recent Deals and 2014 Forecast, touching on many of the elements in valuation play right now. But this analysis says little for the fact that we appear to have a market at the current time that is bifurcated between certain vendors (e.g., Fieldglass) worth 8-12X topline revenue (or higher in the case of certain private investment rounds) and those like Intesource and Iasta which are going for less than two times their topline. In today’s Spend Matters PRO research brief, Group Managing Director Jason Busch and Spend Matters Group Managing Richard Lee offer up a perspective on what elements appear to be driving valuation and multiples in this market beyond the basics of SaaS and related valuation drivers in the procurement, supply chain, and finance areas.more ▸
Webinar Wednesday: Selecting Procurement Technology: Tips From the Analyst Dream Team (Pierre + Jason)
We will be hosting the Selecting Source-To-Pay Technology - Modules vs. Suites vs. End-to-End Approaches webinar on Wednesday, June 4 at 2 p.m. CDT. This event will feature our own Pierre Mitchell (Chief Research Officer) and Jason Busch (Managing Director), with an appearance from Suresh Visvanathan, vice president at GEP.more ▸