If the future is a networked world, then we may well find that the future belongs to sourcing vendors. No other category of vendors has had its landscape transformed so fundamentally by the advent of the Web, to the extent that leading vendors such as Concur and Ariba took early decisions to wholly rearchitect their products to become cloud-native, while an entire new breed of cloud vendors have grown up alongside them.
They knew that the only way to tap into the sourcing and spending patterns that were evolving as the world went online was to become cloud-native. In the process of adapting to this connected, always-on, and now increasingly mobile environment, they have moved further and faster than most other categories of enterprise software vendor.
Today, the cloud is further transforming the nature of sourcing itself, enabling new crowdsourcing strategies in which prospective suppliers — not only of goods but increasingly also of intellectual labor and professional services — compete in a global marketplace on a contract-by-contract (or even microtask) basis. This form of online sourcing is still in its early stages of evolution, as it irons out the intricacies of automated reputation rating and price setting, while guarding against the constant attempts of participants to game each platform for short-term profit. Once these teething issues have been resolved, automation of the sourcing and spend management process will step up to an entirely new level of innovation, which will likely have repercussions across other application stacks they'll link into, such as HR and revenue management.
This overview of today's leading cloud supply chain and spend management vendors is the fifth and final in my series of blog posts setting out a cloud perspective on the old, established categories of enterprise software. Previous posts looked at what replaces ERP, the redefinition of CRM, the fast-changing landscape of collaboration, social and docs and the new, people-first nature of HR and talent management.
These reviews take a strictly cloud-only stance, and I focus on larger enterprise offerings rather than those for SMBs. Some vendors may be past or present consulting clients or work with me in the EuroCloud industry association, but know not to expect any favors from me in my independent writing. This is a necessarily brief overview, and if you feel I've missed any important players or points, please use Talkback below to add your feedback. If you want to drill in further, one expert I can recommend is fellow Enterprise Irregulars blogger Jason Busch and his colleagues at Spend Matters.
Concur. The granddaddy of expense management in the cloud, Concur Technologies was founded in 1993, had its IPO in 1998 and then completed the transition from conventional licensing to subscription-based cloud multi-tenancy in the full glare of public financial disclosure — "Don't do it as a public company," CEO Steve Singh later advised. Now firmly established in the cloud, Concur is continuing to grow its ecosystem of partnerships, ranging from travel providers such as hotels group InterContinental, to participants in its newly launched App Store. Its $120 million acquisition of travel planner Tripit in 2011 was the most noticeable of a number of steps it is taking to enable travel and expense management on the move. Today it is working to make sure that its mobile applications take full advantage of location awareness, recommendation engines and push notifications to act as an intelligent travel assistant to users on the road.
SAP/Ariba. Long before its acquisition by SAP, spend management vendor Ariba migrated away from its on-premise heritage to become a cloud applications vendor. It has now become the core of SAP's cloud offering for managing suppliers, although this is not the first time SAP has ventured into the cloud on the back of an e-sourcing acquisition. One of Ariba's srongest suits is its network of one million registered suppliers, which claims an annual transaction volume of close to half a trillion dollars. Such huge numbers demonstrate the value that can be amassed by building up a global network in today's networked economy, even if Ariba sometimes spoils the effect with high charges for processing electronic transactions. The challenge for Ariba and its parent SAP is keeping its offering relevant in a fast-evolving world.
Other supply chain. Moving goods and services around the world requires a vast hinterland of hidden support services in fields such a freight management, financial and customs documentation, warehousing and logistics, and much more. Among many innovative and specialist cloud players here, one to watch is GTNexus, which manages both physical and (after its merger with TradeCard) financial supply chain processes. Others to mention include B2B integration giant GXS, which operates a SaaS portfolio to manage supply chain activity, supply chain management vendor e2open and, on a different tack, cloud bill of materials management specialist Arena.
Coupa. The fastest-growing of the next generation of spend management vendors, Coupa has always led on bringing ease-of-use to business procurement. Over the past few years it has rounded out its offering with a range of spend optimization tools, including the acquisition last month of expense management provider Xpenser to add improved mobile functionality. It is becoming a serious challenger to the established enterprise vendors in its space.
Rearden Commerce. One of the most overlooked names SaaS players in the spend business, Rearden Commerce has been playing a long game to build its next-generation vision of automating connections between buyers and sellers, backed by $340 million of venture and strategic investment to date. In late 2010, it swallowed up smaller spend management player Ketera, although a later realignment saw Rearden doubling down on its core commerce network offering.
Other spend management. Other pureplay SaaS vendors in the space include Perfect Commerce and leading commerce network operator Hubwoo. Notable players serving the SMB market include Bill.com, which automates invoicing, bill payments and collections,, online invoicing, billing and accounting vendor Freshbooks, and ExpenseWatch.com (owned by Amazon CEO Jeff Bezos).
Other expense management. Despite the dominance of Concur, there are many others around, including Certify and SMB-focused webexpenses. Adding mobile functionality early has helped open up opportunities for more recent newcomers Expensify and Shoeboxed.
Crowdsourcing. There's an explosion of experimentation and innovation as the world of crowdsourcing matures. Traditional contingent labor sourcing providers such as IQNavigator should probably be looking over their shoulders at these uniquely cloud-powered providers who bring on-demand to the world of clerical and professional services. Beyond the more established freelance networks such as eLance and oDesk, there are a range of more specialized crowdsourcing marketplaces springing up, ranging from 99Designs for creative work and XTM Xchange for translation, through to Blur Group's platform for everything from artwork to accounting. Others such as CrowdSource and CrowdFlower focus on harnessing microtask labor. These services are not yet hooked into other enterprise procurement and workforce management applications, but their impact when that happens will be enormous.