Another sourcing casualty

April 22nd, 2008 at 08:06am David Bush - Iasta

I guess it would not be a month in supply management without some tale of woe coming from the vendor community. This time it comes in the form of Davaco Sourcing (notice website does not exist any more). At one time, this company was pretty strong in eSourcing for the retail vertical. They originally started as a fixtures procurement application, but switched to general sourcing functionality in 2003. We had beaten them head to head, but the battles were tough, as they were backed by Davaco Inc., in Dallas.

As described by themselves: “DAVACO is the nation’s leading provider of retail services, specializing in the quality management and execution of high-volume rollouts, retrofits, resets and new stores. Our range of comprehensive services helps retailers from concept to grand opening and beyond.”

From everything I know, Davaco is highly successful and a well run company. I think I even remember seeing their signage on a building in Dallas. However, this did not make the eSourcing venture sustainable. In this instance (to the best I can figure out), the company just did a full shut down, not even announcing it publicly. I would suspect they will keep their IP for the sourcing advisory practice, since it appears the SaaS business model had become unworthy of continuation.

This industry is highly competitive. Anything less than full commitment to the success of a company is adding even more pressure and stacking the deck against your chances of survival. I know they had lost at least 2 major clients to Ariba within the last year, and it was no longer viable. I do not know any one there, but from the outside, this looks 100% financial, as the revenue was not supporting the operation. Since they did not liquidate the company, it is likely that the software is much more valuable to them internally, than to any one else.

The drum beats on. The strong will survive and make this industry stable, some day. The question is, how long will it take?

Entry Filed under: General, Technology, e-Sourcing Marketplace

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