Why do we write about “small procurement solutions providers”?

We got a very interesting comment at the weekend that I wanted to answer directly. Daniele Brione had a bit of a go at us for covering smaller firms (Proactis, Wax, Coupa) too often – with the suggestion that they are businesses whose market cap / size / results  “don’t suggest that Ariba or SAP should hold out too much concern”. Brione went on to say, “My only question is why these firms are given so much credit in these pages given the numerical realities”?

That’s a really good question actually. So here we go, with a totally honest answer!

1.  Biggest reason – it would be really, really boring if we only wrote about the big firms all the time. And I get bored VERY easily. Boring to write about, boring to read. That’s why the music magazines don’t just feature Lady Gaga or Rhianna every week. Or the car mags the Ford Focus. I like writing about stuff that I find interesting, new, exciting. Sometimes that is SAP – as per the InfoNet review the other day, a product I think is really innovative – sometimes it is some much smaller firm. That’s an open invitation by the way – if you have an exciting, innovative product / solution / idea, let us know!

2. Linked to that, anyone who writes about a particular interest area tends to get excited about predicting future directions – using the music analogy again, trying to spot the next Lady Gaga (Ben Howard is on the road to greatness; look out for Natalie Duncan perhaps and Django Django will be huge...) is more fun for reader and writer than just more of the same. Coupa are growing like mad and we do think they’re probably a mega-player of the future (unless they get bought first).

3.  You can’t just take market capitalisation as an indicator of interest. You can have a small market cap but actually quite a large installed base of interested customers – I’d put Proactis into that category for instance.  (And we have reported honestly on their financial situation).  And while SAP have a huge market cap, of course procurement is only one relatively small element of their total portfolio. Sure, they are big in procurement, but they’re not the only game in town.  So we’re simply trying to cover the bases for all our readers.

4. However, I’d point out that we (our site, Spend Matters US and our new PRO site) have written something well over 10,000 words on the SAP / Ariba deal, its consequences, the products, the strategy etc.. so we’re not exactly underplaying the “big boys”!

5.  Finally, while we do write genuinely very independently, of course we think we’re going to get more chance of sponsorship and revenue if we cover a wide field of providers. It’s not the main reason – that is the “boredom factor” above! But yes, we think it’s commercially sensible to range widely across providers.  Having said that, two of the three "smaller" firms Brione mentioned have not paid Spend Matters UK/Europe a penny to date, while the third (Coupa) kindly gave us a couple of grand to sponsor our birthday event last year. So maybe the strategy isn't working anyway!

Thanks for the question anyway – and if there are other firms you think we should be covering, do let us know. But remember - it has to be interesting. Yet another press release that says "XYZ Corp has just launched release 7.4 of their online collaborative trading supplier platform with new KRF-powered 27 mega-bit inference functions and go-faster stripes...", just doesn't do anything for us I'm afraid..

Voices (3)

  1. Matt Waugh:

    I welcome the coverage of the smaller providers, especially as they are opening up the small/mid market to affordable/practical P2P and spend control solutions. Other examples to those small providers already mentioned include Compleat Software who are offering a 10 user system SAAS system for £100 pm…something worth talking about!

  2. Daniele Brione:

    Peter thanks for such a comprehensive response. It makes sense. The only additional point I would make is that none of the three companies mentioned are new young upstarts. One was born in 1996 (same as Ariba actually) and the other two in the early 2000s is my understanding. There are some much newer niche players out there who I agree make very interesting subjects (tradeshift is one example) but my perception is that Coupa, Proactis, WD are not really doing anything new or different – they are playing catch up (from a long way behind) rather than driving anything new into the space.

    To continue your music analogy, if Ariba is U2 (hugely successful and guaranteed to sell out the stadium tour every time) if a little long in the tooth… Proactis and Wax have been playing the pub scene successfully for 10-15 years now with a good but tired U2 copycat set and Coupa is Susan Boyle… Been silent all her life but now with Simon Cowells help (or in Coupa’s case Rob B) and money (or in Coupa’s case rounds A-X of VC millions) behind her is bound to turn out a few big hits before the public realises its nothing that exciting or new. I am also interested in the next big thing but the signs don’t point to these companies being that. Maybe I’m wrong but I hear nothing to suggest I am.

    To Charles, comment… My point wasn’t really about biggest being best. As a typically short Italian I need no convincing of that. My point is about credibility and the feeling that some of the coverage suggests that these companies are true competitors of others. It feels like SM is skewing the reality of the market which is borne out by the numbers. Whether it is market cap, revenues, spend through-put, reported customer savings, or any other given metric, these companies are barely scratching credibility. Why would a large corporate incest in a p2p programme to save €10m, €20m or even € 30m with a solution when the vendor’s owners (shareholders) don’t value the entire firm at such values – doesn’t pass the smell test does it?

  3. Charles Dominick, SPSM, SPSM2:

    I applaud Spend Matters and other sites that cover the FULL spectrum of providers. Let’s face it…everyone already knows who Ariba is because they have the marketing budget and history to be known on their own. But while they became a household name and positioned themselves for acquisition, they were no longer known among those who knew the field well as the most innovative provider that addressed the most complex challenges in their space. Without independent coverage of all providers of all sizes, procurement executives and practitioners may miss out on the providers that have the best solutions for their unique combination of challenges.

    Biggest is frequently less-than-best. No seasoned and educated procurement professional will think that the biggest supplier is always the best supplier.

    Keep up the great coverage of the market, Peter.

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