Emptoris + diCarta from the humble vendor’s perspective

April 11th, 2006 at 12:02pm David Bush - Iasta

Its finally official…a few little birdies left me voice mails and emails over the last couple weeks about this merger/acquisition but I left Spend Matters to be the official bean spiller. I only knew the basics anyway and Jason’s site is more for news of this matter. Well done - breaking this early, Jason and skewering the lazy reporting on the issue.

So, what does it really mean to e-Sourcing and the industry? First of all, I think this is a real shot over the bow to SAP. diCarta spent a lot of effort trying to stay off SAP turf, specifically in SRM. Uhh…not any more. I do not believe the NetWeaver integration is meant as a good thing for SAP, merely an easier path to use Emptoris over them. They are clearly moving into a huge solution package with a lot of horsepower.

Next, I have heard good things about the Emptoris product. I also know diCarta to be a strong CM solution from people I know there and demos I have seen. Sounds like an awesome future for the industry as long as your name is GlaxoSmithKline or Boeing. You dont puff up to 320 employees and this much overhead to provide cost effective solutions (yes, I know about MSFT and Emptoris is not MSFT). This should be a very compelling piece of software, if you have the budget and resources to implement it.

There will be an interesting period that Emptoris will need to navigate during the transition. Of course, to the public it will all be sunny days and high fives, but I have seen many mergers and there is a lot of work to do, especially with technology integrations. It never goes as smoothly as planned and with two large scale, mature applications, the truly seamless nature of the solution is a ways out. I have heard about similar difficulties and talent departures regarding similar merger deals.

From my perspective: Does this effect Iasta? Well, of course it does, but I feel, in a positive way. The reason for this is because as more companies get pulled up into the large client profile, it leaves behind a growing vacuum of solutions that can be used by the masses. I can say for a fact that most $500m companies are not going to spend $250k for CM plus that much for SM. By creating this spend management “super company”, it will be very hard to make money in the lower markets. Hence…good for us with our considerably more reasonable price point and functionality.

It is all getting very interesting. SAP is the company that really needs to worry about Emptoris and Ariba. For that matter, will Ariba go acquire a CM company now? I know that they do not have comparable technology to diCarta and might be at a significant disadvantage now. For me, it is nice to just sit back and watch all the bloodletting. Those companies are making big bets with a lot to lose. There is plenty of room in the market for various strategies to be executed. I do not think either plan is wrong and both can be successful, but I do appreciate having virtually no competitors with the same functionality/price combination that we have and the growth potential that our position affords us.

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Entry Filed under: Contract Management, Functionality, General, Technology, e-Sourcing Marketplace