Mountain View, CA July 15, 2002 MarketMile, an American Express-based e-procurement service provider for mid-market companies, this week acquired spend analysis specialist Aentropy in a move designed to strategically expand its service offering.
The acquisition will take effect immediately, with MarketMile purchasing all the shares of Aentropy in exchange for an undisclosed amount of MarketMile stock and cash. MarketMile and Aentropy have been working together for the past two months to integrate the Aentropy solution with the MarketMile platform.
The integrated offering is currently in pilot testing and will be available to new clients in the third quarter of this year. "The acquisition of Aentropy will allow MarketMile to significantly increase the value of our service offering and expand our footprint in the spend management technology market," said Steve Savignano, acting CEO of MarketMile.
"We chose Aentropy because of their use of inferencing technology, which increases the value of the technology and spend information over time," said Savignano. "This technology is generations ahead of the competition. And Aentropy's ability to deliver spend analysis as a Web service fits perfectly with MarketMile's service delivery model."
"MarketMile, with its partnerships with American Express and IBM Global Services and clients such as Universal Studios and Ciba, was the caliber of company Aentropy wanted to align itself with," said Ruby Sahiwal, president and CEO of Aentropy. "Our solutions complement each other to such an extent that there was no question about merging our companies."
Sahiwal co-founded Aentropy after serving as chief operating officer of VerticalNet Solutions and president of Tradeum, which was acquired by VerticalNet. He will join MarketMile as the company's chief operations officer.
"[Chief financial officers] and purchasing executives often have to operate in the dark, making decisions without a true understanding of their spending," said Rudy Sahiwal. "And if a company doesn't have a clear understanding of its spending then they are blind to the opportunities for savings."
Spend analysis solution offers a starting point for controlling spending by providing a clear, detailed analysis of a company's spend. Spend analysis solutions help companies gather, cleanse, categorize and structure data from such sources as accounts payable and general ledger data files. Aentropy has said its solution's reporting tools provide a virtual "dashboard" for corporate executives to monitor and control spending.
Gene Richter, president of Richter Katonah, formerly chief purchasing officer for IBM and currently an advisor to Aentropy, put his stamp of approval on the acquisition. "With this acquisition, MarketMile puts itself in an even stronger competitive position," he said. "The addition of a spend analysis component to their e-procurement solution gives them one of the most comprehensive spend management solutions available."
Industry analysts report that the market for spend management, procurement and sourcing technology solutions will nearly triple from their current level within two years, reaching more than $3 billion by 2004.