E-Sourcing Forum » Global economy buckles

Global economy buckles – spend management…?

October 1st, 2008 at 06:44am David Bush - Iasta

Apparently, it is showing major cracks too, although I will only speak for others as Iasta will be clocking in some pretty good numbers in 2008.

First, there were the rumors about major problems at Emptoris. A week before this post come online, I knew something was going on, as I got 4 resumes from people there. I do not know anything more than that, so it could be GE style housing cleaning, or major restructuring due to a poor Q3. Additionally, this credit meltdown could easily be a factor. Every business is being affected right now, no matter how well they are performing. If they could not extend their capital needs, the first thing to be addressed is labor costs. {Update: insiders tell me it was 7 people and politically motivated, considering the size of the total headcount, it is really immaterial.}

Then, out came the Ariba downgrade this week, which claimed historically weak Q4s from Ariba and that the, fourth quarter will be the last full quarter of growth boosted by the company’s acquisition of privately held Procuri. This resulted in a 13% market cap haircut. Being publicly traded certainly changes your priorities and Ariba is the barometer that our industry is tracked by, which is not good. {Update: since this announcement, ARBA has recovered much of its losses, despite the downgrade, which is good news.}

Meanwhile, SAP is being skewered for its SaaS performance. This is not specifically regarding the SAP eSourcing application, but it is part of the SaaS family.

Nothing positive in here from the industry bellwethers. Although the analysts think that Q4 is traditionally poor, I disagree. We will see how the final 3 months play out.

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