Live From Zycus' Analyst Day — Dispatch One

I'm in Boston today for Zycus' industry analyst day. I'll share my early notes today in this post (and possibly a follow-up) and then double click on the key learnings with additional details and analysis next week.

Aatish Dedhia, Zycus' CEO, kicked off the vendor's analyst day about 30 minutes ago discussing his firm's growth strategy. He began his discussion by positioning the third position for procurement software vendors as up for grabs. He suggested Ariba is currently perceived as number one. SAP and Oracle are viewed number two. But the third spot is not determined. In his words, Zycus' "eyes are on the number three spot". This is the firm's goal. Over the next three years, "this is where Zycus wants to get."

Aatish then described the vision of building a strong suite of products versus just being a one hit wonder. He argued that as the market matures, customers want a suite (e.g., spend analysis, sourcing, contract management, supplier management, financial savings management) and that depth is as important. In his words, "Each product has to be able to fight an independent battle against the best of breed for that product." He mentioned Aravo as an example. Zycus, in his view, must have a supplier management product that can stand against the best in supplier management versus just filling out the suite. Along with breadth and depth, ease of use most be paramount, Aatish noted. This will be a key defining tenant of Zycus' suite strategy. Masking complexity while also embracing at the core (where necessary) is essential.

In terms of acquiring new customers, Aatish said that Ariba's sales force currently comprises around 115 quota bearing reps. "The number of new accounts are usually proportional to quote carrying reps in software," he remarked. Because of this, Aatish has decided to double the size of the Zycus sales team every 18 months. The first step was moving from 13 to 28 quota bearing reps between 2010 and 2011. This trend will continue in 2012 and beyond.

Zycus' primary sales strategy will be direct vs. embracing channels going forward. Here, Aatish noted that "when we moved to SaaS over the past three years, partners have become less important because you don't have the implementation of the software." As a result, Zycus "is consciously moving away from a partner strategy and 80-90% of the strategy will be direct. The only exception is international. For example in Germany, Zycus has a partner. In these geographies Zycus is focusing on reseller partners rather than SI partners."

Stay tuned as our coverage of Zycus' analyst day continues.

Jason Busch

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