Future of Emptoris Within IBM Unclear Due to Recent Departures, Other Uncertainties

The Spend Matters team has learned the situation of the Emptoris business unit within IBM appears to be in flux, according to several sources.

IBM acquired Emptoris from Marlin Equity in 2011 for a rumored $600 million. At the time, Emptoris employed more than 700 professionals. Since then, IBM has continued to support a range of customer deployment options for the solution and made general enhancements to the various modules, including a user interface update to meet IBM standards for different components.

Spend Matters received a briefing from IBM in Q4 2016, during which time the company shared a number of 2016 enhancements Emptoris had made to its product suite focused on usability, including:

  • Deeper support for spend analytics and reporting on Cognos 11
  • “Further UX technology rollout for accessibility” in other areas
  • Overall enhancements to the user experience for contract search and contract editor capabilities

Emptoris also shared with Spend Matters that 2017–2018 user interface improvements would also include adding Watson to the reporting capability of the solution. IBM noted that it was investing in adding broader cognitive and natural language processing capabilities to the Emptoris suite, as well as broader internal/external systems integration with complementary IBM applications (e.g., Maximo, FileNet, etc.) and with partner solutions (e.g., Coupa). Earlier today, IBM told Spend Matters it is in the process of going live with a GA version of release 10.1.3 in the near future and plans a release of 10.1.4 later this year.

Yet recent events suggest the overall future of Emptoris within the IBM portfolio remains uncertain. Spend Matters has spoken to numerous customers, partners and others close to the organization in recent days and has learned about significant changes that appear to be taking shape.

What We Know and Don’t Know

Spend Matters has learned that Emptoris has had multiple rounds of employee departures in recent quarters, including a considerable number of staff members who have been given 90 days notice in recent weeks. This includes not only commercial team members but also product management and customer support/implementation professionals, as well. (In certain cases, it appears the majority of entire teams are or will be eliminated.)

According to our sources, it would appear that the downsizing or elimination of teams and roles would appear to be larger than typical attrition due to standard cost reduction or performance management exercises. IBM did not provide comment on these activities to Spend Matters, although Spend Matters has substantiated these claims from several sources, including direct conversations and through other primary intelligence gathering.

There are numerous additional considerations involved in the current situation of Emptoris and IBM that Spend Matters has heard about from multiple parties, yet has not been able to substantiate with IBM or other sources. These include the possibility (unconfirmed) that the Emptoris business unit is being positioned for divestiture to an external party. Again, these statements from our sources have not been substantiated by IBM, but have been made by multiple individuals outside the organization.

Looking Ahead

The Emptoris asset looks substantially different from when IBM acquired it. In 2011, Emptoris had leading (functional) capabilities in many areas in which it competed, although these solutions were not fully integrated (and not part of a single code base). Six years later, IBM has not been able to maintain the functional edge the solution set once enjoyed in supplier management, sourcing, contract management, analytics and related areas, and Spend Matters only infrequently sees Emptoris as a consideration in customer evaluations in comparison with its shortlist frequency at the original time of acquisition.

If there were in fact a divestiture, perhaps new ownership could elevate Emptoris once again to a position of leadership and innovation in the strategic procurement technology market. We’ve always respected the functional depth and nuances of the products, but success requires many factors beyond functionality to compete successfully in the market.

We’ll report back on this evolving story as the situation unfolds and we learn more directly from IBM and our sources. Stay tuned.

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First Voice

  1. Sachin:

    Emptoris product was a rich in feature and was a market leader, but it went to wrong hand and this is the result of wrong decision.
    Worst end of great product.

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