Earlier this week at Empower, the annual IBM procurement event, IBM Emptoris and Coupa announced a broader sales and distribution partner agreement, one built on top of a previous partnership between the 2 vendors. The IBM team told Spend Matters that the 2 providers have approximately 6 clients in common right now, including a large financial services client. The partnership goes beyond a distribution agreement from an IBM perspective and also includes joint API-based and pre-built connector development that is in progress.
Writing on his firm’s blog, Rob Bernshteyn, Coupa’s CEO, makes the following observations about the partnership:
“…Together with IBM, we’re announcing a new joint solution that seamlessly combines IBM Strategic Supply Management with our Coupa Procure-to-Pay (P2P) and Coupa Open Business Network solutions. IBM and Coupa have partnered previously on joint ventures, and this new solution deepens our partnership.
IBM will now resell Coupa [i.e., selling on IBM’s paper] and we have both committed to investing resources to ensure that the unified solution provides more value than either solution alone could deliver to the world’s biggest companies.
IBM’s solution handles deep supplier intelligence, complex contract management capabilities and multi-faceted risk scores. Preferred suppliers are automatically presented to users in the easy-to-use consumer-like shopping platform that Coupa has become known for, seamlessly integrating automatic compliance with complex business rules into the natural buying process. Supplier collaboration is handled through the Coupa Open Business Network for purchase order, e-invoice and related transactions, at no cost to suppliers.
IBM has complex contract lifecycle capabilities that help procurement professionals ensure that they’re not only getting the best price, they’re also protecting the organization from risk by dealing with legitimate suppliers. That’s good supplier hygiene, and IBM has a best-in-class solution when paired with Coupa’s platform.
We’re partnering with IBM because these complex supplier and contract capabilities are important, and we’re not building all of them out just yet. We’ve made a strategic decision to spend most of our near-term energy and resources on unique functionality that helps companies save more by bringing more categories of spend under management, making it so every employee can be a responsible spender.”
We have our own views on the partnership and have shared these on Spend Matters PRO. But perhaps most important, the partnership raises just about as many questions as it answers:
- Will the partnership allow IBM Emptoris to “pass” more first-round RFP screenings for prospects looking for an integrated source-to-pay (S2P) solution rather than just an “upstream” set of solutions in the sourcing, spend analytics, contract management and supplier/third-party management areas?
- Will being on the basic IBM price sheet have the type of impact that both parties would like to see given the Enterprise Licensing Agreement (ELA) model that has been important for many IBM Emptoris sales to date – but that is not yet covered by the agreement?
- Will Coupa, which has historically been perhaps the most aggressive solution provider in sales pursuits in the broader S2P sector, also support IBM sales, where the Emptoris product line is stronger – or will Coupa prefer to push its own modules? We have observed in this sector that sales behavior in the field and business development/marketing alignment do not always walk in the same direction.
- Given that IBM has developed pre-built connectors and APIs, what will the integration actually look like? In which system will a vendor/supplier master reside? How will portal registration and the updating of vendor data compared with catalog/content data work? These are just a few of the integration questions that matter.
- Coupa is a vendor that remains in hyper growth mode at the moment on just about all fronts from product innovation to customer count to revenue growth. In contrast, Emptoris IBM is much more mature and conservative in its expansion plans and overall go-to-market approach. Will the two cultures mesh from a partnering perspective?
- Given the significant P2P gap in the IBM Emptoris product set in a market in which suite deals – or at least suite capability are increasingly becoming common, wouldn’t an acquisition of key technology make more sense? Might IBM Emptoris look at Coupa as an acquisition target, and this merely a first step in the M&A dance?
We are excited to see IBM Emptoris expand the breadth of its capabilities that it can deliver through the partnership. But with partnerships such as this, the devil really is in the execution details. For our perspective on the partnership and prospect/customer recommendations, please see our Spend Matters PRO analysis, published earlier today.
(Cross-posted @ Spend Matters)