Who is Patrick Grady? That's a question that is likely to be answered many times over in the coming months as his"employee business services" company, Rearden Commerce, gathers market momentum.
Grady told our own Dan Farber that it was the "extreme audacity" of the undertaking that kept him quiet about it since it was launched in 1999. But nowRearden has emerged -- on a foundation ofWeb services architecture -- with a platform for automating and orchestratingthe procurement of air travel, car rental, package shipping, conferencing and other business services.
Leveraging XML and other Web services technologies, the company has built a platform that enables companies to manage "maverick spending" and reduce costs associated with disparate vendors of business services. By providing greater visibility into spending levels and compliance with procurement policies, Rearden intends to save its clients vast sums each year.The prospect already has attracted an array of well recognized clients. Among them:Cingular, Genesys, JDS Uniphase, Motorola, Warner Music, and Whirlpool.
One attraction lies in the ability to aggregate application functionality, rules and information. "The applications are in different silos, with no interoperability or integration with calendars, address books and devices. It's a big hairball," Grady said. "At macro level, you reach a state of diminishing returns. With the introduction of each successive application, the adoption rate goes down. Contained in applications are the business rules, polices and negotiated rates a company has sourced with vendors. If employees don't use the applications, lots of money is lost."
Rearden Commerce's EBS platform is based on the idea thatfunctions across different business services can be abstracted and encapsulated as reusable Web service components. "There are scores of common characteristics among services. We cracked the code and took the time on the design side to understanding common traits," Grady said. "Web services are no cure-all. We are on the ground with real knowledge of the system, and we have had to master not just Web services, but also calendaring, notification, invitations, voice and how to orchestrate and interoperate."
As a hosted, mult-tenant service, Rearden resembles salesforce.com. Services are accessible through a Web interface and its "Services Grid" enables the integration ofbusiness service suppliers. At this point, the company haspre-qualified (with service-level contracts) an array of major suppliers, with access to 80,000 hotel properties, over 530 airline carriers, and more than 50,000 restaurants.
Large corporations are expected to pay annual subscription feesof about$1.5 million (with 3-5 year contracts), while mid-market firms are expected to pay about$300,000 to $350,000 per year.Reardenclaims its clients will receive 20 percent savings by channeling requests through the system and as much as50 percent cost savings throughself-service activities -- which makes the ROI of the offering clearly worth consideration.
Grady hasgrand expectations for the endeavor."Many key industry players need standards to transact. There is one eBay, one Amazon, only four airline applications, which will rationalize to one or two vendors. We will be one of the gorillas," he told Farber."We will be lowest cost provider of services because of the stack we built."