Consolidation in the e-Sourcing Market

Perfect Commerce adds hosted solution with MaterialNet acquisition

Palo Alto, CA  July 8, 2002  Consolidation hit the e-sourcing market today as Perfect Commerce announced that it had acquired MaterialNet.

Both companies are privately held, and details of the transaction were not announced.

Perfect is rebranding the MaterialNet Custom Procurement Management System as Perfect Bid Manager, and the solution provider said it will continue to develop the MaterialNet application based on customer feedback.

Perfect said it has acquired MaterialNet's customer support and maintenance agreements to ensure customers experience no interruption in their regular service. Perfect is also providing a migration path Bid Manager and Perfect's own Supply Manager.

"This move extends our reach to first-time e-sourcing and auction customers, expands our product line to the broadest in the business, and makes our customer base the largest in the business," said James McCormick, president and chief operating officer at Perfect.

Tim Minahan, vice president of supply chain research at technology consultancy Aberdeen Group, suggested the acquisition would allow Perfect to pursue a "dual go-to-market strategy." Perfect can provide its own e-sourcing platform to major corporations while offering MaterialNet's hosted auction solution for companies that aren't ready to deploy sourcing software behind their own firewall.

"The acquisition of MaterialNet is very strategic, giving Perfect Commerce access to a broad range of new customers and markets," Minahan said.

Michael Inman, director of general purchasing at MaterialNet customer America West Airlines, was optimistic about the acquisition. "MaterialNet's reverse auction product has consistently delivered significant cost savings on top of reducing our negotiating time," Inman said. "We look forward to working with Perfect Commerce and exploring the supplier performance management capabilities available in [the Perfect solution]."