This is all beginning to sound like a broken record, as the 3 Spend Matters stock pickers show that you should listen to us when we talk about procurement strategy and technology – but perhaps not when we talk about which firms’ stocks in our market you should buy! Yes, April was a dismal month for myself, Jason Busch and Nancy Clinton in terms of our virtual/ imaginary stock portfolios that we chose at the beginning of the year. We picked 24 firms, large and small, for our overall portfolio that contains publicly quoted businesses that operate in the procurement solutions market. Indeed, it was not a good month either for the overall portfolio, which dropped some 3% even though most global markets picked up slightly (1%-3%) during April. Global markets are around 6%-8% up on the year so far, but our portfolio still fell, which suggests some industry specific factors at play.
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Cloudbuy, then called @UK PLC, was floated on the AIM stock market way back in 2005. The firm focuses mainly on spend analytics and electronic marketplace provision, although there is some legacy business too (more on that later). Since that flotation, the business has had a checkered existence. The shares were issued at 60 points, raising about $11.7 million, and at one stage fell back into single figures as annual results consistently showed losses and limited revenue growth. More capital has been raised along the way, the last tranche of $5.87 million last October, which helped drive a share price revival – it hit 40p late last year. It then halved to under 20p recently, only to recover to around 30p over the last couple of weeks following the announcement of its 2014 results.
Last week, Finnish technology firm Basware announced it will acquire Procserve, which is headquartered in London. According to the stock market release on the acquisition news, (Basware is quoted on the Finish stock exchange), “The acquisition price is approximately EUR 25.9 million. In 2014, the net sales of the acquired business amounted to approximately EUR 9.6 million.” Procserve has a strong position as a provider to the UK public sector, particularly with its marketplace technology, having grown from what was initially an early in-house venture into e-procurement by the UK government itself. Esa Tihilä, CEO of Basware, was in London recently to meet and present to the Procserve staff and explain the vision for the future. I was able to catch up with Tihilä as he headed back to Heathrow Airport.
IQNavigator’s product roadmap and investments in big data initiatives around the future of talent management – including, but not limited to, contingent labor – yield a number of clues into the direction of the future of vendor management systems overall. While a number of items on IQNavigator’s product horizon are no doubt designed to keep up with the competition, there are new areas that are truly creative and potentially game changing around improving overall procurement outcomes for a broad range of services. This Spend Matters PRO research brief explores IQNavigator’s product roadmap and solution direction, highlighting a number of truly creative ideas ranging from the user experience, including the UI-less UI, and the future of prescriptive procurement analytics.
The Novice Investor Trounces The Experts! The February 2015 Spend Matters Stock Portfolio Update [Plus +]
The month of February has probably had less written about it than any other month. In the northern hemisphere anyway, it is often cold and gray, the time when we all get a bit sick of winter and long for the first stirrings of spring. And (dubious lead in there), it has been a bit of a gray month for the stock portfolios of 2 of your esteemed Spend Matters commentators, while stock markets generally have been far from gloomy. The month wasn’t great for our overall procurement stock portfolio, which includes 24 firms that have a procurement angle to their business; from giants like IBM and Infosys, to minnows such as Access Intelligence or Rosslyn. The overall portfolio was up a couple of percent on the month, but is down 1.6% on the start of the year. That is disappointing for our sector, given the stellar start to the year that most wider stock markets have seen.
IQNavigator is a vendor management system (VMS) provider in the midst of an important transition, which includes “doubling down” on a focus on technology R&D in part by continuing to add R&D resources following the sale of its MSP arm, more aggressively embracing partnership with the MSP ecosystem than in the past and starting the implementation of a strategy to “roll up” smaller VMS providers in the sector through acquisition. In December, Spend Matters Founder and Managing Director Jason Busch spent the day with the IQNavigator team in Denver to drill down on company strategy and product direction and met with the European team in the UK in early February to get an update on activity from the other side of the Atlantic. This multi-part Spend Matters PRO analysis covers his findings and analysis, beginning with a 2015 IQNavigator company update and European market adoption trends.
Following up on the earlier reports on Coupa's announcement that it is acquiring ZenPurchase – a recent startup focused on collaborative sourcing – I had the pleasure of speaking with the CEOs of both companies recently. Find out what the 2 leaders had to say about the merger and what is ahead for the new firm.
In recent years, Spend Matters research suggests that Coupa has led the market for new e-procurement sales in North America. It also built material traction in parts of Europe – something that many US providers struggle to do. The European traction is all the more remarkable because Coupa brings a very US-centric view to P2P – empowering the end-user rather than creating a command/control catalog-driven structure. In this PRO analysis, the Spend Matters research team explores a number of scenarios and considerations for Coupa in 2015 and 2016 (including a potential IPO), and what it means for customers, potential customers and partners of the high-growth vendor. The team begins today by providing historical context for Coupa and outlining engagement tactics for maximizing value when working with the fast growing vendor.
Last week, Xchanging announced it is acquiring Spikes Cavell, perhaps the largest global public sector spend analytics provider (measured by customer count), albeit still very small. This deal is about far more than blurring of the lines between BPO and SaaS applications within procurement. Along with truly booming customer growth and substantial organic product development within the MM4 sourcing suite – MM4 was the fastest growing sourcing vendor in 2014 by our count – we are seeing a combination of events that should be a wake-up call to Xchanging's competitors, customers and prospects. This multi-part Spend Matters PRO analysis, authored by the Spend Matters research team, starts with a product analysis of Spikes Cavell and a summary analysis of MM4 – and the likely synergies between the solutions. Our analysis will continue later in the month with competitive analysis and customer recommendations.
Yesterday, in Part 1, we looked at the individual firms whose shares we included in our Spend Matters 2014 stock portfolio. The portfolio is headed for a pretty flat performance over the year in terms of valuation, but that includes some big variations between firms. Note that our comments here purely relate to what you might call the “corporate events” of the year, and major factors that have affected the share price. It has only a limited reflection, for instance, on the products and services that procurement people might actually use (although obviously if a firm’s share price collapses, there is usually a reason). Anyway, here is the second batch of firms – in alphabetical order – from our portfolio.
In Part 1 of our analysis of MBO Partners, we considered how the firm provides a range of unique capabilities for independent consultants and freelance workers. This begins with tests to show (for their clients) whether or not they are compliant with regulatory guidelines for working independently and additional capabilities that span through payroll, withholding, expense management, invoicing and more. MBO’s solution also includes what Spend Matters believes is probably the only “live” case of technology-intermediated trade financing in the freelancer/contingent market today. As our look into MBO Partners continues in Part 2 of our analysis, we will consider the buyer-side view of the independent consultant/freelancer equation with MBO Partners and the broader vendor management system (VMS), freelancer management system (FMS) and managed services provider (MSP) ecosystem.
Earlier today Thomas Kase (VP of research) shared some quick comments on the rumors that SAP is thinking about buying Concur. This Spend Matters PRO article is the in-depth analysis. "Say it ain't so" is what first came to mind, not that Concur is either shoeless or cheats. There are of course positive aspects to the acquisition as well. Thomas expands on the pros and cons of such a deal, as part of his advice to Concur's shareholders and customers.