Oracle announced today that it is now selling SaaS sourcing products. As the number two company in the Supply Management market, this product is long overdue. SAP acquired Frictionless Commerce back in 2006, while Ariba - the best of breed SaaS market leader - acquired Procuri in 2007.
The SaaS product is currently based on Oracle Sourcing and Oracle Sourcing Optimization, part of the Oracle E-Business Suite Release R12. The new SaaS offering is being deployed in two ways. The first is a single-tenant version sold by Oracle directly. The second is a multi-tenant product sold by Oracle and supported by e-Three. e-Three is headquartered in London with US coverage from Washington DC. e-Three strengths lie in it’s global network of ex-FreeMarkets sourcing consultants that have deep category and process expertise, coupled with their multi-tenant sourcing technology.
The SaaS announcement timed perfectly for supply management executives trying to find immediate sourcing savings. Chief procurement officers continue to face little or no capital budget and similar support internally for IT expenses and maintenance fees. In addition, with corporate cutbacks continuing, reduced staff is a major factor for all CPOs. SaaS provides the necessary technology to streamline and optimize across businesses while leveraging all available resources. SaaS has become a necessity in tough economic times for businesses of all sizes. See my last post: SaaS: The supply management market’s economic stimulus?
The Oracle SaaS Sourcing announcement is a long awaited announcement. While the product finally brings Oracle into the market, there are a few unanswered questions. How will the product sell? How does it stack up against the current market place? And if the product and e-Three team is so great, why didn’t Oracle buy it, like the other 40 plus acquisitions in the past few years? Only time will tell how the market reacts. Kudos to Oracle for finally jumping on the SaaS bandwagon; let’s see if it fares in the market.