Hubwoo — A Little Oracle Mistress on the Side?

A Spend Matters reader recently tipped me off to an online Oracle newsletter suggesting that Hubwoo might be cheating on its German wife by sneaking out with a West Coast mistress. According to Oracle, "Look for details in the coming weeks about a plan to combine Oracle Sourcing with Hubwoo's global sourcing expertise and hosting services … According to sources close to the discussions, the strategy calls for Hubwoo to implement an instance of Oracle Sourcing 12 (R-12) and make it available to customers that prefer on-demand implementations or those that require specialized expertise to improve sourcing results ... Hubwoo and Oracle plan to offer customers a range of flexible programs designed to improve sourcing execution. The addition of R-12 to Hubwoo's procurement offering would give customers instant access to the application's latest features, including a new user interface, configurable negotiation styles, and automatic and team-based scoring. Hubwoo has already begun implementing R-12, sources say … Insiders say a formal agreement may be announced by midyear."

This news surprises me a bit given how close Hubwoo is to SAP (a member of the SAP executive team sits on Hubwoo's board). But I highly doubt that this deal would have been possible without SAP's blessing.

Regardless of the politics and alimony involved in getting the deal done, it bodes well for Hubwoo in North America -- not to mention Oracle customers alike. And that's because Hubwoo will now be able to sell Oracle shops on the same story which it has successfully worked with dozens of SAP customers. The story line is simple: start with our hosted solution first. If you like it, you can eventually license it directly and move it behind your firewall. But in the meantime, we will not only get it working for you. We'll also provide the enabling services and expertise required to help you build traction.

Still, this type of message will not play as well from a truly lines-drawn competitive standpoint given that the product focus is sourcing and not procurement. Why? Because when it comes to sourcing, the secret truth is that there’s virtually no benefit of going with your incumbent ERP provider (unlike e-procurement) today, given the limited amount of integration required between sourcing platforms and back-end systems. It's plausible though unlikely that an SAP customer might chose Oracle's sourcing product through Hubwoo -- or vice versa -- simply because they think it's a better tool. This is why, in fact, that Ariba and Emptoris, among others, have been able to build greater marketshare than SAP an Oracle in the sourcing market to begin with. Hence, I'm guessing that hosting Oracle Sourcing is really just the first step to a broader Oracle/Hubwoo agreement that extends into the procure-to-pay process. Stay tuned for further analysis as this story develops.

- Jason Busch

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