Verticalnet and Two Types of Unions

I spotted the Verticalnet / Digital Union deal earlier this week. Overall, it's another indicator of global consolidation in the Spend Management applications and services market.

Verticalnet has come a very long way since its .com marketplace days. Now, dear readers, you should discount everything I say about Verticalnet because I do owe the vendor a debt of gratitude. After all, I did meet my future wife at a party they sponsored back in the B2B heyday in 1999 (a million dollar affair on an aircraft carrier). But the vendor really has remade itself over the years.

Consider where it's been versus where it's headed. Formerly, liberal radio hipster Mark Walsh called the shots back in the day the firm was more about places -- and fabulous parties -- and less about markets. As a personal aside, I'd argue that Mark's latest venture shows that he still does not know how to invest others' money effectively -- or pick a winning concept.

But back to Verticalnet. The vendor's luck changed when they started on their targeted acquisition binge when Walsh left. First, as memory serves, they acquired Atlas Commerce, which essentially was a Tradex platform that actually worked (how novel is that?). It's only problem was that it was simply too late to the market, though it did mark Verticalnet's entry in the applications world. And the Atlas acquisition, in fact, was the only reason AMR rated Verticalnet a serious procurement / sourcing contender back in its first feature report on the sector in 2002.

Next, Verticalnet acquired Tigris and B2eMarkets to round out its services and on-demand capabilities. Smart, targeted moves on many levels. The former Tigris team is composed of some of the most forward thinkers I've met when it comes to sourcing complex categories. And Verticalnet gave B2e’s investors more than a haircut when they bought them for pennies -- well dimes -- on the original investment.

Now the Digital Union deal comes around, which plays into a global expansion theme, and gives them inroads with IBM to some degree (how much is real on a commercial basis, I don't know). But you have to applaud Nate and company for putting the company back on track over the years.

Jason Busch

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