As you know, and much like the coverage of our industry in general, I usually find press releases announcing either a new client win, or a merger and acquisition, as little more than the perfunctory dissemination of information that reveals little if anything meaningful. In fact, the vast majority of announcements would be better placed in either a Facebook discussion stream or Twitter Tweet, in which someone shares what they had for lunch that day.
. . . this result should emphasize the importance of the need for the assessment or explanation of industry events to appeal to a much broader audience, an audience whose influence on both adoption and outcomes can no longer be overlooked. – May 21st, 2009 PI Post Achieving Practical Outcomes to Complex Purchases at the Heart of the Emptoris Acquisition of Click Commerce
What this means is that in reviewing all of the press releases that cross my virtual desk every morning, each and every one follow a similar and monotonous pattern of gushing, mind numbing sentiments from the world of “the new client is wonderful, we’re wonderful, and gosh darn it everyone is wonderful” dribble.
It is through this discriminating filter that I try to find the underlying relevance of an industry event. An example of this is my coverage of the Periscope acquisition of BidSync, which eventually evolved into the NIGP #CodeGate controversy (Up Periscope? Examining Periscope’s acquisition of BidSync with a “Survivor’s” eye).
So when the news that Tradeshift landed Air France-KLM has a client, it is through the above referenced scrutinizing eye that an interesting angle to the story caught my attention.
SAP is attempting to “buy its way into the cloud” . . . versus actually “being in the cloud.” – Vishal Patel, Head of Industry Solutions, Tradeshift
Often times, the best insights come from asking outside of the box questions.
For example, when I asked Tradeshift’s Vishal Patel if the company’s win was a reflection of the fact that SAP’s traditional stronghold in key markets such as the airline industry, was beginning to wane, he expressed the opinion that it was. He of course prefaced his response with the politically correct statement that SAP is still a strong presence, and that Tradeshift was happy that they could easily integrate with the company’s back-end enterprise application.
I then asked him why he felt this shift in market influence was occurring? Could it be for example, tied to the recognition that the old ERP-based eProcurement solutions of the past never delivered on their promise (refer to my Gartner Postmodern ERP post from December 6th, 2014)? Did this, I continued, open the door to the acknowledgement on the part of corporate clients that to be effective, platforms such as Tradeshift and Nipendo do not have to be expensive overarching endeavors that take years to implement, before delivering tangible benefits?
After giving a positive response, Patel added that besides his company being in the “right place at the right time,” Tradeshift’s strategy of “complimenting rather than replacing incumbents such as SAP” played an important role in landing the Air France-KLM deal.
This being said, he then went on to suggest that Tradeshift’s ability to seamlessly add third-party apps to their platform, thereby expanding the company’s ability to offer a complete supply chain solution, was ultimately the driving force behind their future success.
This reminded me of my interview with IBM’s Pete Wharton back in December. At that time Wharton, who is Big Blue’s Commerce Solutions Product Marketing Leader, explained that the company’s collaborative partnership with JD Edwards was part of a plan “to create an ecosystem of technology partners to extend IBM’s service capabilities to its customers.” In short, and similar to IBM, Tradeshift is building its own ecosystem through the incorporation of third-party apps that compliment their core offering.
I then posed the following question; given that IBM has recognized and appears to be responding to this market shift, where does this leave SAP? For example, would SAP follow a similar path to that of IBM?
This is when Patel made the statement that SAP is making attempts to “buy its way” into the cloud.
Based on his statement, I asked Patel if this made Tradeshift an acquisition target, and if it did, what would the company do?
While acknowledging that Tradeshift would indeed be an attractive takeover target for SAP – or for that matter any other large ERP provider, he was not sure that he could answer how his organization would respond to such an overture.
What he does know however, is that there is a definite trend on the part of companies to “move away from SAP,” citing both Air France and DHL as being prime examples. My take regarding this last statement from Patel speaks volumes, in that it suggests that SAP is in a state of static oblivion. Specifically, if they don’t do something to successfully “buy their way into the cloud,” they could eventually find themselves relegated to back-end system spectators, with a diminishing market influence and share in the new world of collaborative eCommerce.
In this context, the Air France-KLM win may very well represent one of several critical turning points in terms of where our industry, and the overall market itself, is headed – including the determination of who will be at the helm of this brave new world.
To me, this is the real story behind the Tradeshift contract win.