Though not surprising, the big players are gaining on these requirements better than anyone else in the market. However, other players continue to have their specialties.
A.T. Kearney Procurement Solutions will be sloughing off its application development area and will use supplier UGS, now a private company originally owned by
EDS (A.T. Kearney's parent company). A.T. Kearney Procurement Solutions will stick to its professional services offering, letting UGS take care of the software component. Like FreeMarkets and ADR International, A.T. Kearney has a clear edge in strategic sourcing professional services but has struggled with staking a prominent claim in the e-sourcing market. As AMR's Mitchell has often said, "Consultants should stay out of the packaged applications business and major in what they're good at."
On the other end of the spectrum, Emptoris, with great software functionality, is struggling with its direct sales model but sowing potentially healthy seeds with its indirect business model by partnering with the likes of Capgemini and IBM. Another encouraging note for Emptoris that could help revenues is the latest release of their supply management software.
Strategic sourcing services are the very reason that Verticalnet recently acquired Tigris. With combined revenues of $6 million in the first quarter of this year, the numbers are down, but this duo can now reflect a nice technology suite with great professional services. AMR Research predicts they will bring in $25 million in 2004 revenue, down from $30 million last year, due to the typical challenges of synchronizing two newly merged organizations.
On another front, B2eMarkets recently closed a major deal in Europe with a government agency, obtaining more exposure in the public sector vertical. And Frictionless Commerce continues to do well in the financial and utilities verticals with both its indirect and direct model.
With D&B's revenues flat to down in e-sourcing services, Austin Tetra becomes its major competitor with a model that's similar but more economical. And in the public sector, Silver Oak Solutions dominates. ICG Commerce is doing well in business process outsourcing — the "hot" issue in the market today.
Last year, the analyst firms suggested that while i2 and Manugistics do well in the market with component supplier management, they could build out more functionality in e-sourcing. i2 is succeeding in this endeavor, but Manugistics appears to be in the same spot as it was last year.
And on the other end, there are those providers that needed to improve on their component supplier management functionality, and Agile acquired Tradec for just this purpose. More improvements are to be made in total cost modeling, but this functionality is coming-of-age for them.
As stated earlier, users want to see greater connectivity between order/demand management, product lifecycle management and sourcing. Continue to watch i2, Agile, Polydyne, RiverOne, Demand Management and MatrixOne for this. If you look outside the United States, LeftBrain, a Geneva, Switzerland-based organization, creates connectivity between these core supply and demand chain functions. The exciting aspect is that players are more sensitive than ever before about combining these critical areas of the supply and demand chain.
Zycus continues to be recognized as the leading player in spend data management for the sourcing space. Ariba acquired Softface this past March in order to improve on this functionality.
Other analysts recognize that Archimedian Software, Mindflow Technologies, Diligent, Global eProcure, B2eMarkets, Perfect Commerce, MatrixOne, Moai Technologies and Procuri's strength continues to reside in the request-for-quote, -proposal and -information (RFX) bidding events and bidding analysis. Mindflow, Diligent and Procuri continue to have strong footprints in specific vertical markets, realizing great partnering opportunities with providers whose strength is in the strategic sourcing professional services area. For a low-end, quick hit reverse auction environment, Iasta can be an experience for the first-time user who wants to dabble.
Winner Takes All
If the ideal merger can create hybrid sourcing and spend management delivery models — ones that incorporate self-service application platforms and category-specific market intelligence and process methodologies — then are we finally getting the well-bred racehorse?
AMR Research and Aberdeen Group tell us that corporations want three things from enterprise-wide e-sourcing solutions: 1) total cost compliance, 2) e-sourcing connectivity and visibility into the demand management tools already in place, and 3) true strategic sourcing aggregated from the technology.