As an unbiased third party – I’m about as unbiased as you can get given the fact that I used to work for a bigger rival of Iasta’s and currently know just about every major vendor in the space and count many as consulting clients – I can say that the strategy that Iasta is going down by extending its SmartSource capability and not charging more for additional breadth and depth is a good one for practitioners. Because ultimately, it’s going to cause price compression in the market, as larger providers are forced to bundle more for a fixed – or at least a lower — price as well. Iasta is also being honest about their capabilities (at least as they’ve pitched them to me). For example, we can all agree that Iasta’s latest contract management extension does not approach the capabilities of one large 128 vendor, but for many companies, basic contract management capability is a huge step over what they have now (which is a shared C-Drive and a bunch of word documents scattered every which way around the globe).
On a somewhat unrelated note, I wonder if there’s also a play for virtual extensions to sourcing suites which are free or incredibly cheap and can be downloaded or shared in a central repository on the Web. Think app-exchange meets Open Source apps meets Spend Management. They’re already small providers like Buyer Analytics who offer cheap extensions to Excel. Why not extend this into the business application realm as well? Call me crazy, but as an old friend who knows more about this sector than I ever will told me yesterday, “things want to be free”. Whether it’s a process-bolt on supplier content, the Google model has got potential, even in the Spend Management world. I reckon we’ve not even seen the start of what the dominant – at least from a revenue generation standpoint – business models in the sourcing sector will look like a decade down the road.