Final word (for now) on Emptoris and Rivermine

A couple of weeks have gone by since Emptoris announced their acquisition of Rivermine.  So just to tie up the various writing on the topic, at the end of this piece I've listed all of Jason's Spend Matters US posts on the topic and our two previous pieces.

To complete the discussion for now at least, I've been reflecting on what this means for market positioning for Emptoris and competitors, and also how customers might look at the various competitive offerings and think about what it is that interests them particularly.

It seems clear that Emptoris are positioning themselves to provide truly 'expert' software (and some associated services) that assists with and gets deeply into the management of specific complex spend categories.  Contingent labour, professional services and statement of works (for instance) came with their acquisition of Click Commerce; telecommunications is added to the portfolio with Rivermine. There are still some gaps which might give scope for further product development and / or acquisition of course; travel and logistics / transportation for instance. But Emptoris is building an impressive range of category capability.

Now, there are some downsides with this approach.  For smaller firms, it may all be too much to implement multiple approaches to different categories, and it may be questionable whether such firms can drive enough benefit to make the business case stack up for this type of approach. But Emptoris seem to be setting their sights pretty clearly on larger clients anyway, who will generally be sophisticated enough to look at different categories in somewhat different ways.

And there are other potential market strategies of course.  Some vendors may look to focus on a very specific client market sector - there are many providers who specialise in sourcing for the public sector for instance, who may calculate that their understanding of the intricacies there may be more important and valuable for clients than deep category capability.  Others may focus on a particular critical element in the sourcing process; auctions or optimisation, for instance. Again, that may appeal to users who have particularly pressing needs for those capabilities.  Or it may be that a positioning that sells on the basis of usability is a viable strategy; low implementation costs, ease of use, availability of great support, or offering an outsourced service on the back of the technology.  And of course price / cost comes into the positioning as well; another factor which providers and customers must inevitably consider.

I can think of firms who arguably are following each of these different strategies, and there is nothing to say at this moment that the Emptoris approach is the 'correct' strategy.  It is also true that this is a market with huge natural growth potential; many firms have no sourcing technology to speak of, or use only a small element of what is available.  This isn't a zero sum game for providers, and there is room for many to succeed.  But the Emptoris direction of travel seems clear, and that should enable current clients, potential and future customers, and competitors to assess what it means for them.

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