Verticalnet: Waiting For Its Chance to Shine

Late last year, Bravo Solutions announced it was acquiring Verticalnet, ending a long, drawn-out guessing game as to who would get its hands on the provider who was hamstrung in the customer market by a more than precarious financial position (which gave new meaning to the term "supply risk"). It was unfortunate at the time that Verticalnet did not get more at bats than it did because its solutions -- some of which I recently wrote about here -- stack up quite well in the market indeed. With the Bravo Solutions acquisition which I would expect to close in Q108, there's a strong chance that Verticalnet's solutions will finally gain the audience the solutions provider has been hoping to achieve for years.

Most companies that I speak with are not familiar with Verticalnet's relative depth in such areas as spend analytics, sourcing and supplier performance management. I suspect this will soon change. When I last caught up with Verticalnet, I learned they still had approximately 30 people on the R&D side -- a significant chunk for a vendor in survival mode throughout much of the past couple of years. They also managed to maintain approximately the same number of folks on the implementation and account side as well. In other words, there's a solid -- albeit relatively small compared with Ariba, Emptoris and SAP -- team to back up their current solution suite and to invest in future solution enhancements. I suspect that as the team and solutions are absorbed by Bravo, they'll finally have the funds to put into sales and marketing in North America and Europe to complement their R&D and implementation investments. This should give the new Bravo/Verticalnet more at bats, and I'm guessing, significantly more customer wins.

In all of these areas that Verticalnet focuses on, the one I'm personally most interested in for 2008 is supplier performance and risk management -- and the intersection of spend analytics with performance management (an area which Verticalnet is beginning to talk about in their marketing). In a recent chat with Verticalnet, I learned that their supplier performance management solution, while garnering attention with customers, is still not a driver of individual deals. Rather, it's usually a key component of suite sales. In particular, industrial manufacturers and pharmaceutical companies appear to be the ones most interested in the solution area. And the most advanced ones are now including such factors as "innovation contribution" and "sustainability" in their performance management and scorecarding areas. Fascinating, and let's hope a harbinger of things to come as Verticalnet, Emptoris and others begin to push hard on the performance and risk areas.

- Jason Busch

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