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Icertis: Vendor Analysis, 2020 Update (Part 3) — Competitors and CLM Market Analysis

The third and final installment of this Spend Matters Vendor Analysis provides a look at Icertis’s competitors and a market analysis of vendors in contract lifecycle management (CLM).

As contract management has become a hot topic in the B2B tech sphere, competition between CLM vendors has increased. Customers are looking for an expanding list of capabilities from their CLM solutions, to include not only core clause library and repository support but also automated contract data extraction and ongoing compliance management tools. 

Icertis has maintained a top spot in the contract management market due to its deep support for both the essentials and its continuing expansion of what a CLM platform can do. Organizations evaluating potential vendors will find that Icertis is a strong fit for many cross-enterprise use cases and that the firm does not shy away from complexity where alternatives might falter. At the same time, several CLM vendors are beginning to compete with Icertis on its key vulnerabilities, and a surge of investment in contract analytics, either via acquisition or native development, has kicked off an AI arms race with multiple fronts. 

Part 3 also includes an objective SWOT analysis of the provider, tech selection tips and a summary analysis. Part 1 provided an in-depth look at Icertis as a technology provider and its specific solutions, and Part 2 gave a detailed analysis of Icertis's solution strengths and weaknesses and a review of the product’s user experience.

Now, let’s take a deeper look at the company and Icertis’s competitors.

Icertis: Vendor Analysis, 2020 Update (Part 2) — Product Strengths and Weaknesses

This Spend Matters PRO Vendor Analysis update explores Icertis’s strengths and weaknesses, providing facts and expert analysis to help procurement organizations decide whether they should shortlist the vendor.

The contract lifecycle management (CLM) technology market is not one market. Rather, this technology comprises several subspecialties, each served by a diverse set of vendors with varying degrees of capability. Because of this, procurement, commercial, legal and other users have significant choice between broad-based suites and independent CLM vendors today.

Within this market, Icertis is one of the few providers delivering a robust enterprise-class CLM solution with significant depth across all functional areas of CLM that Spend Matters tracks. Moreover, Icertis takes a truly platform-based approach, rather than offering just a set of fixed modules on a menu. It’s also built on a modern technology stack and continues to adopt some of the latest tools to drive new innovations, particularly in the competitive realm of CLM-based AI. With powerful functionality comes challenges, however, as SolutionMap customer references indicate, with UX/UI factors frequently cited as an area of ongoing improvement.

Part 1 of our analysis provided Icertis's background and detailed solution overview, as well as a summary recommended fit suggestion for when organizations should consider Icertis in the P2P technology area. The final installment in this series will offer a SWOT analysis, user selection guide, competitive alternatives, and additional evaluation and selection considerations.

Icertis: Vendor Analysis, 2020 Update (Part 1) — Background and Solution Overview

contract

This three-part Spend Matters PRO Vendor Analysis provides an update to our previous review of Icertis, adding new assessments of core capabilities and introducing new functionality in the Icertis Contract Intelligence platform that's relevant to buy-side and enterprise CLM use cases.

The technology providers that define the contract lifecycle management (CLM) space are the ones that have continuously pushed the boundaries of what such solutions can do. No longer simply concerned with document storage, search and standardization, leading CLM systems have evolved their focuses to include capabilities such as granular obligation modeling, performance management and AI-assisted process automation.

Icertis, one of the top-performing CLM providers in Spend Matters’ CLM SolutionMap since our vendor rankings began, is at the forefront of this development.

The vendor has for several years demonstrated deep support for advanced CLM use cases, from obligation management to multi-tier subcontracting support, many of which have set the functional bar within our SolutionMap evaluation process.

And in the two years since we published our last Vendor Analysis on Icertis, the product’s innovation vision has only continued to grow. Most notably, Icertis has released several AI applications designed to bridge the gap between the contract analytics space and traditional CLM, as well as a set of unique business applications that overlay distinct business processes on top of the contract-based platform, including an RFX application that enables contract-centric sourcing.

Part 1 of our analysis provides a company background and detailed solution overview, as well as a summary recommended fit suggestion for when organizations should consider Icertis. The remainder of this multipart research brief covers product strengths and weaknesses; competitors and a market analysis; a SWOT analysis and tech selection tips.

Icertis

As part of the SolutionMap RFI process, Spend Matters continuously solicits customer references to determine a procurement technology provider’s placement on the ranking graphics. This is a Spend Matters curated summary of verified customer feedback for Icertis, a SolutionMap-ranked provider.

Icertis becomes first true CLM unicorn, with $115M funding round — and it sits atop a market that’s red hot and ripe for M&A

Global Risk Management Solutions (GRMS)

Icertis announced today that its latest funding round raised $115 million and that the provider of contract lifecycle management (CLM) is now valued at more than a billion dollars, reaching proverbial “unicorn” status.

The funding round was led by two groups, Greycroft and PremjiInvest, with participation from B Capital Group, Cross Creek Advisors, Eight Roads, Ignition Partners, Meritech Capital Partners and PSP Growth, according to a press release. The latest round brings total funding to date to $211 million, the release said.

Mark Terbeek, a partner at Greycroft, said in the release: “We’ve seen (Icertis) become the undisputed CLM leader, acquiring a huge stable of blue-chip customers and generating a return on capital that is among the best we’ve ever seen. We have no doubt they will become the next giant in the enterprise SaaS market.”

The release also noted that “the AI-infused Icertis Contract Management (ICM) platform is used by companies like 3M, Airbus, Cognizant, Daimler, Microsoft and Sanofi to manage 5.7 million contracts in 40+ languages across 90+ countries.”

Icertis is private and doesn’t disclose revenues, but it has been growing extremely quickly (claiming 125% CAGR over the last four years), and with over 800 employees, a forward-looking revenue run rate approaching $200 million seems reasonable, and only requires a 5X multiple to get to a $1 billion valuation (we believe the revenue multiple to be higher than this).

Also, Icertis is a clear market leader in the CLM space based on our latest Q2 2019 SolutionMap deep-dive competitive assessment (available here for free). And, Icertis competitor Exari was recently acquired at roughly a 10X multiple, so there should be little doubt about Icertis’ favorable prospects.

Icertis announced that its new $115 million in funding will be used for continued product development in adjacent product areas (and geographies), verticalization, possible acquisitions, blockchain development and, of course, AI — which is red hot in CLM.

Spend Matters has covered Icertis for years, and while the firm’s stated mission to “become the contract management platform of the world” may seem a bit audacious, the firm has executed historically well due in part to its strong management team and focused strategy as a true CLM pure play that doesn’t focus on any one particular business process area (e.g, within the sell-side for customer contracts).

The firm is also buoyed by the fact that the CLM market is throwing off its shackles as a place for glorified document management systems set up by legal departments to transfer commercial risk to counterparties. Rather, contracts are becoming the ultimate system-of-record for B2B commerce, not just from a legal department standpoint, but a financial one (e.g., where contracts become the new ledgers that augment the G/L), a regulatory/risk standpoint, and an operational one relevant to any place where internal/external stakeholders make commitments to each other.

We call this concept “commercial value management” (CVM), and we discussed its framework in a recent Spend Matters PRO research paper titled “Commercial Value Management: Making Contracts the Commercial Core of Enterprise Value (Part 1).” In it, we stated:

“There is a subtle shift happening within the scope of contract and commercial management (CCM), and a not-so-subtle shift that is also happening within the digital realm (e.g., namely artificial intelligence, low-code platforms, open source, “XaaS”). What’s happening is that as contracts get digitized and more deeply modeled, they are becoming the single most important piece of master data within the enterprise that touches virtually every single stakeholder within these core processes and also within corporate functions such as R&D, risk management, strategic planning, treasury, audit, sustainability, digital/innovation and others.”

In the rest of this Spend Matters PRO / Nexus brief, we’ll examine the following topics:

* Icertis’ prospects relative to multiple CLM market segments and competitors
* How CLM’s evolution to “CVM” impacts Icertis. (Think of CVM as “extended CLM” on steroids.)
* M&A, exit and other considerations for Icertis — including potential acquirers as an alternative to an IPO.

And in a subsequent deeper dive in the August/September inaugural Spend Matters Nexus members’ newsletter for private equity firms/investors, corporate development teams and solution provider CEOs, we’ll feature Icertis and analyze:

* Icertis’ strategy: lessons learned and key takeaways
* Valuation drivers (for Icertis and similar firms) and possible Icertis M&A acquisition prospects/targets
* The prospects for procurement suite providers with legacy CLM capabilities and Apttus, Conga and others in a CVM world

OK, let’s get to it …

Icertis: What Makes It Great (Contract Lifecycle Management SolutionMap Analysis)

Editor’s note: This “What Makes It Great” column is normally reserved for SolutionMap Insider Subscribersbut Icertis has generously agreed to support access for readers who are not yet members. 

As of Q3 2018, Spend Matters SolutionMap provides functional and customer satisfaction benchmarks for more than 50 software providers within the procurement, finance and legal technology sectors. To date, we have rated 13 providers for the contract lifecycle management (CLM) benchmark. Not every provider, however, has yet appeared in the CLM SolutionMap ranking charts and SolutionMap Insider subscription publications, because some are simply too far off the functional mark to make the cut.

This is not the case with Icertis. In fact, Icertis sets the functional bar for CLM, pushing some of its competitors off the map in the process. In the latest SolutionMap benchmark dataset, Icertis takes first place for Analyst scoring. Within this market, the vendor stands out from the crowd for both the breadth and depth of its functional capabilities, as well as for its platform-based approach to CLM. But where does Icertis stand out most, and why should this matter for procurement and legal organizations? Let’s delve into the SolutionMap CLM benchmark to find out.

“What Makes It Great” is a recurring column that shares insights from each quarterly SolutionMap report for SolutionMap Insider subscribers. Based on both our rigorous evaluation process and customer reference reviews, each brief offers quick facts on the provider, describes where it excels, provides hard data on where it beats the SolutionMap benchmark and concludes with a checklist for ideal customer scenarios in which procurement, finance and supply chain organizations should consider it.

Icertis: Vendor Analysis (Part 3) — Summary and Competitive Analysis

Icertis is one of a select number of contract lifecycle management (CLM) solutions that can equally support the needs of both legal and procurement organizations. Its solution provides role-based dashboards and workbenches that enable diverse users across global organizations to interact with contracts, related information and documents not only within the context of core CLM but also within other processes such as source-to-pay (S2P), quote-to-cash and industry-specific workflows.

This third and final installment of this Spend Matters Vendor Snapshot covering Icertis provides an objective SWOT analysis of the provider and offers a competitive segmentation analysis and comparison. It also includes recommended shortlist candidates as alternative vendors to Icertis and offers provider selection guidance. Finally, it provides summary analysis and recommendations for companies considering the vendor. Part 1 provided an in-depth look at Icertis as a technology provider and its specific solutions, and Part 2 gave a detailed analysis of solution strengths and weaknesses and a review of the product’s user experience.

Icertis: Vendor Analysis (Part 2) — Product Strengths and Weaknesses

The contract lifecycle management (CLM) technology market is not one market. Rather, this technology comprises several subspecialties, each served by a diverse set of vendors with varying degrees of capability. Because of this, procurement, commercial, legal and other users have significant choice between broad-based suites and independent CLM vendors today.

Within this market, Icertis is one of the few providers delivering a robust enterprise-class CLM solution with significant depth across nearly all functional areas of CLM that Spend Matters tracks. Moreover, Icertis takes a truly platform-based approach rather offering just a set of fixed modules on a menu. It is also one of a handful of enterprise contract management solutions built on a modern technology stack, as well as one of the few that revolves entirely around the contract — even if its UI reminds us more of the end of the Obama era than Brexit.

This Spend Matters PRO Vendor Snapshot explores Icertis’ product strengths and weaknesses, providing facts and expert analysis to help procurement organizations decide whether they should shortlist the vendor. It also offers a critique of the user interface. Part 1 of our analysis provided a company background and detailed solution overview, as well as a summary recommended fit suggestion for when organizations should consider Icertis in the P2P technology area. The final installment in this series will offer a SWOT analysis, user selection guide, competitive alternatives, and additional evaluation and selection considerations.

Icertis: Vendor Analysis (Part 1) — Background and Solution Overview

As our Q4 2017 CLM SolutionMap highlights, the range and depth of functional capability between suite-based contract lifecycle management solutions and independent, top-performing CLM vendors is increasing, not decreasing. Icertis, one of the top-performing CLM providers in the analysis, is driving this change. It is less than 10 years old but already used in 40 languages within 90 countries, supporting more than 750,000 users and 2.5 million active contracts.

But it is not just the underlying functional “mojo” among top-providers like Icertis causing the divergence for specialized CLM requirements. The most recent class of CLM providers that have graduated to best-of-breed status have designed their solutions to support an increasing range of contracting, collaboration and obligation management scenarios that support supplier agreements, sales contracts, leases, partnership agreements, employment agreements and other agreements between parties. And they are doing so with the simultaneous goals of increasing both efficiency and contracting effectiveness.

This Spend Matters PRO Vendor Snapshot provides facts and expert analysis to help procurement and legal organizations make informed decisions about whether Icertis, as a standalone CLM solution, is a better fit than using a suite-based contract management provider. Part 1 of our analysis provides a company background and detailed solution overview, as well as a summary recommended fit suggestion for when organizations should consider Icertis. The remainder of this multipart research brief covers product strengths and weaknesses, competitor and SWOT analysis, user selection guides, and insider evaluation and selection considerations.