Hubwoo – making SAP sexy with cloud-based eProcurement

We featured Ariba’s results and comments from Jason Busch yesterday, and in that piece mentioned Hubwoo.  Coincidentally, I had a chat with them last week, so it was interesting to get their take on the competitive landscape.

Hubwoo operate in a unique manner. They have a very close (for you biologists out there, it is symbiotic rather than parasitical) relationship with SAP.  But Hubwoo operate purely in the procurement and supply chain space, obviously unlike SAP for whom procurement is just one part (growing but still relatively small) of their entire ERP suite.

Hubwoo provide additional products and services that support SAP users in a number of areas. That includes consulting type services to assist with SAP implementation, and add-ons to SAP products to improve performance and capability.  For instance, Hubwoo overlay process templates and content solutions onto the standard SAP product to make it more user friendly and intuitive; with features such as “guided buying” and catalogue product comparisons that aren’t part of the basic SAP product.

Perhaps most importantly from a strategic point of view, they allow clients to deploy SAP “in the cloud” with a software as a service (SaaS) model.  They run the Hubwoo / SAP Business Network, and support clients who are looking to deploy SAP or extend its usage far more quickly and easily than a behind the firewall approach would allow. They can also work with mixed models – so an organisation with SAP behind the firewall can add-on some SaaS products via Hubwoo for instance.

The senior Hubwoo execs I spoke to had no doubt that SAP were losing out to Ariba at one stage a few years back. That started to change with some of the acquisitions SAP made (like Frictionless), and by offering the SaaS model in particular, Hubwoo believe they are helping SAP further strengthen that competitive position.

“There are a lot of organisations out there who are basically SAP users, but have invested in Ariba or other solutions to meet needs in the procurement area that SAP didn’t really fill. We believe we can fill those gaps now, so there’s no need for a SAP client to go elsewhere”.

That’s a summary of the pitch Hubwoo are making, and they claim it is resonating with many organisations.  And SAP are strengthening their own procurement capability, with more staff and (as Jason has been reporting) some potentially very interesting new offerings like InfoNet - more shortly on that as well.

The Business Netowrk offering (in conjunction with Crossgate, who are particularly strong in the e-invoicing area) is another direct attack on Ariba’s dominance in this field. It allows suppliers and buyers to connect, run procurement exercises, exchange information and handle transactional processes through the network. If Hubwoo and their partners can replicate what Ariba have done in this field – or indeed improve on it - this is clearly going to be a major engine of growth for the future.

Hubwoo’s financial results, announced a couple of weeks ago, were solid rather than spectacular.  Revenue was fairly flat, although profitability improved. But there were (as they announced) a number of legacy issues that impacted the figures, and there appears to be a confidence that the company is firmly on the right track now.

So, if you’re looking for a P2P solution for the first time, or you’re a SAP user already, looking to extend or improve its use, there are definitely some options here to consider. And we’ll look at a Hubwoo case study shortly on a recent implementation that throws up some interesting issues and lessons learnt...

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