In a deal that passed under the tech media's radar earlier this week, the leading on-demand expense management vendor, Concur Technologies, on Monday announced it is spending up to $88 million in cash and stock to acquire Outtask, an established on-demand vendor specializing in corporate travel management. Imagine how much coverage this would have gotten if either vendor had been in open source, SOA or some other hot sector. It just shows how little atttention is being paid to on-demand applications.
Nasdaq-listed Concur (ticker CNQR) is already a substantial player. Based on its latest quarterly results, which it announced yesterday, it achieved trailing twelve months (TTM) revenue of $74.8 million, of which $56.2 million was subscription revenue. Adding Outtask will further bolster those figures, and perhaps boost the company's current 30% year-on-year growth rate in subscription revenues (other listed on-demand vendors, such as Salesforce.com, RightNow and WebEx are still growing at closer to 100% year-on-year).
The deal extends Concur's reach into a new but closely related field to its existing specialism. That will probably make the move popular with partners such as ADP as well as with its own sales force, as there ought to be lots of cross-selling opportunities. It does, however, move Concur into direct competition with well-heeled and much-fancied Silicon Valley startup Rearden Commerce. It will be interesting to see what sparks fly between the new kid on the block and an established player like Concur.
Steve Singh, Concur's chairman and CEO, has taken the vendor on a long journey, starting out as a conventional software vendor but successfully transitioning the company to the on-demand model. A few years ago Concur acquired Captura, its closest rival, and has pretty much had the corporate expense management field to itself since then. This new deal is striking out in a new direction and marks an important juncture for the company.