Looking for the Salesforce.com of Spend Mgmt. Software

Earlier today, I had a quick conversation with Jeff Wilson, who runs sales and marketing at Procuri. Procuri, which now claims over 300 customers, has some standing laying claim to being one of the leading providers of on-demand enterprise software applications outside of the CRM market (which has a number of on-demand vendors with traction, most notably Salesforce.com). Yet while Procuri, Ariba, Iasta, Ketera, and Verticalnet have all achieved significant traction in the on-demand Spend Management sector from a customer count perspective, there’s not been a single player to break-out from the rest yet from a revenue standpoint.

In March of this year, I posted a blog predicting that 2005 might be the year for on-demand Spend Management to take off. And perhaps, given the traction that each of the above-mentioned vendors appears to be having with their on-demand products, it has been. But large enterprise vendors such as SAP and Oracle can still take in more revenue in a single large Spend Management deal than most of the pure-play on-demand vendors historically have made in a single quarter (though this might be changing). I guess the challenge that I'm having here is that it would be easier to say that on-demand is breaking out in Spend Management if we could all point to a single vendor's traction as representative of the growth of the model. Indeed, the sector needs a Salesforce.com, and we’ve yet to see one take off yet, despite what a number of vendors would like to claim. Without an emergence of a poster child like this, I believe that on-demand will continue as an important delivery and business model for Spend Management software, but it will not redefine how companies think about buying software overall like it has in the CRM market.

-Jason Busch

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