Concur scales up to challenge Amex, SAP and Oracle

On-demand travel and expense management vendor Concur signaled the scale of its ambition today with the announcement that it is acquiring long-time rival Gelco for $160 million. The news comes hard on the heels of a big product announcement last week, when it unveiled an upgraded platform for integrating travel booking, expense claims and settlement as a single integrated process.

The acquisition allows Concur to race ahead of erstwhile rivals in the expense management sector such as Paris-based KDS and Cybershift subsidiary Necho. The Seattle Post-Intelligencer reports estimated revenues at Gelco of $50 million. While some of those are attributable to Gelco's Trade Management Group, which is being spun out before the transaction, it still adds a sizeable chunk on top of Concur's expected revenue of up to $125 million for the current year. That puts it head-and-shoulders above other pureplay vendors and sets it up to challenge much bigger players, as CEO Steve Singh (pictured) explained to me in a call today.

"With Gelco we're able to drive more scale in the business. Our biggest competitors are American Express, Oracle, SAP, IBM, EDS."

The acquisition builds on Concur's previous acquisition of travel booking venture Outtask eighteen months ago, which resulted in a significant boost to Concur's growth rate. Gelco's strengths, Singh told me, are in the back-office realms of automated expense claim auditing and payment processing. Concur will now be able to cross-sell its other services to that customer base. "Outtask helped us broaden the definition of travel and expense. Gelco helps us add scale," Singh told me.

There's a symbolic element to the acquisition, too. Gelco's history dates back almost a century. The company started out as a business process outsourcer, handling the paper-intensive process of reconciling company expenses. In the past four years, it has transitioned to an on-demand software model, but in doing so it was following Concur's lead rather than anticipating the shift to on-demand. Now it has paid with its independence for that failure to adapt fast enough.