Iasta Morphs and Grows (Part 3)

I've recently heard of a few sourcing related and suite deals where those firms that used to price at the top end of the market (e.g., Ariba) are now being quite aggressive on pricing. My examples come from both the US and Europe -- but Europe to a larger degree -- so it's pretty clear that Ariba is attempting to become the price leader. How ironic is it then that Iasta, which used to compete initially on price, is no longer the least expensive suite vendor, but is now also winning deals on feature/function and ease-of-use over the competition? Still, the good news in all of this is that rolling out Iasta will not set you back too much, especially relative to the value their tools and services are generating for clients.

At Iasta ReSource in Chicago, I had the chance to interview Iasta's David Bush in the area of pricing and product enhancements. He suggested to me that without spend analysis today, a large company using Iasta might spend as much as $150K to $200K with everything included (on a global, yearly basis, including training, roll-out, configuration, etc.) But smaller customers with more targeted deployments might spend as little as $50K to $75K depending on the situation (per year). To gauge what comes with these price points, it's important to note that Iasta no longer offers just e-sourcing. These prices include their entire suite (minus spend analysis) which is comprised of e-sourcing, optimization, contract management, supplier management and supplier performance management.

What is more interesting to me are not just the suite's capabilities or price points, but how Iasta has recently decided to offer two versions: professional and enterprise. And unlike other providers that really try to up-sell more expensive versions to all but the most basic customers, Iasta's Enterprise upgrade really does bring levels of capability not needed by many of its regular customers. Still, at a "15 to 20 percent" price premium, many might decide that the price differential is worth it even if they use the additional capabilities sparingly.

Consider, for example, the difference in the optimization capabilities of Professional vs. Enterprise. The Professional version covers more than enough territory for most users and includes the ability to run allocation and limit constraints. But the Enterprise version adds to this by allowing much greater capabilities around custom constraints (including qualitative constraints), discounts and freight brackets. In other words, the Enterprise version is aiming to truly become one of the defacto high-end standards for optimization (along with Trade Extensions and CombineNet's self-service offerings). Personally, I find it quite ironic that Iasta, that little vendor from Indianapolis, has decided to focus such energies on optimization while the original self-service vendor in the sector, Emptoris, has moved away from prioritizing -- or at least emphasizing -- new enhancements to these capabilities in its own offerings.

But the rest of the suite -- outside of sourcing, which most Spend Matters readers already know is a highly capable product -- is also nothing to thumb your spend nose at. Release 8.0 includes, for example, a supplier management component that lets users collect information and documents from suppliers, manage supplier profiles, assign tasks/questions to suppliers, etc. In other words, Iasta is bundling supplier information management capabilities into its core suite. Now, it's unlikely this offering will ever compete against the likes of the leaders in the SIM market like Aravo, but I suspect that just as Iasta's limited contract management capabilities are proving sufficient for some companies, that this capability will as well.

Stay tuned for further analysis in our final post of this mini-series on Iasta's product and solution roadmap as well as some closing thoughts on what the future might bring for the vendor -- not to mention how customers and prospects should look at Iasta in the context of the broader competitive marketplace.

Jason Busch

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