Emptoris Empower Dispatch: Emptoris is Thriving — But What’s Behind the Numbers?

I arrived at Emptoris Empower last night, just in time to have a few nice catch up conversations with old colleagues and friends. Many of us agreed that the early vibe at the event seemed quite positive indeed, including an Emptoris employee who remarked that attendance should reach 350 this year. But I'm not interested in absolute numbers. I'm most curious about who is here (i.e., company and seniority) as well as the general customer/prospect interest in Emptoris. And judging from my cocktail conversations last night with half a dozen heads of procurement technology (for larger Global 1000 companies) or heads of procurement (many with the CPO title), I'd say Emptoris is getting senior folks in the door. Most certainly, this is backed up by their claimed 91% "sales booking growth" in the first half of 2010, compared with the same period a year earlier. I briefly spoke to one gentleman, a head of procurement, who had recently signed up for Emptoris contract management and was set to go live any day. He seemed enthusiastic to be at the event.

The 91% software bookings growth that Emptoris cites is an extremely high number relative to the competition. Yet in my view, much of the bookings had to be enterprise software rather than SaaS to achieve this number. Even if it was SaaS, assuming an average 3-year term, that's still nearly a 33% increase over the previous year, as a basis of comparison with Ariba and other SaaS-focused providers. Yet I don't believe SaaS is forming the basis of Emptoris' growth. Anecdotally, I confirmed customer interest in more traditional licensing models last night by talking to two customers who purchased installed or single-instance deals in recent quarters.

Clearly, Emptoris has significant customer momentum at the moment. But where is it coming from? A good portion of it owes to their strong channel relationships (Deloitte and Accenture are sponsoring the conference, mind you). In fact, Kevin Potts shared with me that just over 40% of Emptoris' revenue in recent quarters has come either directly or indirectly through its channel partners. And interestingly, Emptoris is getting deals done more quickly -- which means helping customers achieve savings more quickly -- when channels and consulting partners are involved.

The average time to close a deal with channels is 6-12 months, versus as many as 18 when channels are not involved. Kevin seems satisfied with the current channel approach, which remains focused on large SIs/consultancies, rather than overtly on procurement BPO providers. Still, he suggested that relationships with procurement BPO firms, especially the BPO arms of consultancies, do provide a stamp of approval and credibility to work with the broader organization, not to mention their client base.

From a solution perspective, it appears that customers are most interested in suite deals at the moment. Kevin shared that one of the more common bundles includes sourcing with spend visibility. Another common and larger bundle is sourcing with both spend visibility and contract management. Unfortunately, even though Emptoris has one of the stronger supplier performance management capabilities in the market, only minorities of new customers are opting to bundle SPM into initial suite deals. I continue to suspect this will change going forward, but who knows. Contract management is continuing to sell as part of suite deals as well as independently.

Stay tuned for more coverage from Emptoris Empower in the coming days, and follow my live coverage on Twitter: @spendmatters

Jason Busch

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