The Tradeshift / IBX Deal Could Be A Game-Changer

We gave a brief overview here of last week’s news that Tradeshift is acquiring IBX, a division of giant IT firm Cap Gemini, to form a powerful player in the eProcurement and digital commerce market. Apparently, the deal arose from a business partnership – a friendship that turned into a marriage, you might say.

“We started working on a partnership with Tradeshift to complement the IBX platform and address the full source-to-pay needs of our Business Services clients. We realized our cultures were a great fit and that a combined IBX and Tradeshift entity would be the perfect partner for us to go to market with”, said Aruna Jayanthi, Head of Business Services at Capgemini.

We’ve written and spoken quite a lot recently about “source to pay” and single integrated systems or platforms. Tradeshift, although focusing initially in its early (2010) days on eInvoicing, has always had that broader “platform” vision, more than anyone else in our market really. But this deal gives them more capability themselves rather than relying on the idea that others will provide tools on the Tradeshift platform. So IBX brings more in the way of spend analysis and sourcing, for instance, key elements of the end to end procurement picture. IBX also has impressive eProcurement capability with particular strengths in areas such as catalogue management and workflow.

The deal also strengthens the “network” considerably. Tradeshift connects over 800,000 companies across 190 countries already but the “acquisition will immediately bolster the Tradeshift marketplace with the addition of over half a million suppliers and 27 million stock-keeping units (SKUs)”.  The firm claims that this will be “the world’s largest business commerce platform connecting nearly 1.5 million businesses and more than 500 global enterprise customers that have access to the largest supply-chain app ecosystem. With the acquisition, Tradeshift’s business commerce platform is projected to see an increase in transacted value to more than half a trillion dollars over the next 12 months”.

(By the way, SAP Ariba claims to handle “Over US$1 trillion in total commerce each year” so there may be some argument over exactly how “largest business commerce platform” is defined. But there is no doubt Tradeshift is right up there now with the biggest of the big players).

In the UK, both Cap Gemini and Tradeshift are on the Crown Commercial Service UK public sector PEPPOL framework, as the sector supposedly moves towards mandated e-Invoicing using PEPPOL standards. Tradeshift has a foothold in the NHS with their Shared Business Services contract; although other tech providers such as Tungsten and Virtualstock have not allowed Tradeshift to have it all their own way with that customer. IBX has some profile in health as well, so we expect this to be a major area of interest for the firm .

This is exactly the sort of event that those interested in procurement technology should follow on the Spend Matters PRO subscription site. Our colleagues in the US have already written two lengthy and insightful articles about the deal  - the first around the product side of things, then here in terms of the competitive landscape. If you want to know whether you should dump your current provider for the “new” Tradeshift, or who you might want to look at alongside the firm in competitive situations, you really should subscribe. I know I’m biased, but this is very insightful and high quality-analysis.

The conclusion our colleagues reach – which from our less technological viewpoint here we agree with  - is that this is a really important acquisition for Tradeshift and one that could well be a “game changer”. It will get them on a lot more P2P shortlists as an automatic participant, alongside the other “must haves” like SAP/Ariba and Coupa. As the latest Spend Matters PRO piece concludes; “the combination of a broader suite that is “real” now along with vision will put additional competitive pressure on some of the competing vendors that have not given Tradeshift enough credence to date”.

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