PixabayEarlier this week, Coupa stock had a significant slide on the reduced margin guide and a still double-digit but more conservative growth forecast than analysts expected. Of course, the reaction from executives and investors is predictable in terms of the questions it raises about the sector.
Many CEOs and colleagues in private equity, corporate development and venture pinged me to find out if Coupa’s guidance indicated potential conflict in the broader sector.
Everyone wants to know: is this market slowing down?
The short answer is: No.
In fact, its components are expanding at some of the fastest rates I’ve seen in my 25 year analysis of the sector. But there are changes taking place. Like the first part of the universe, atoms and structures collide to create new structures entirely.
What digital procurement will look like in the future is something we can hardly imagine today.
In this review of Spend Matters PRO, I introduced the concept of “alt” suites for Procurement technology, a concept that I think is already developing in parallel in the source-to-pay universe.
This exploration begins with asking:
- What is the concept of the “alt” suite?
Why are they forming?
How do they differ from source-to-pay (and how do they survive)?
What tests do we apply to determine if there is a particular “alt” suite?
To mention the immortal Bruce Richardson, it’s time for the worlds to collide. And so they appear as the following five “alt” suites:
- Asses-to-Monitor (A2M)
- Spend Finance (SpendFi
- Design for Supply (D4S)
- Strategic Spend Terminal (SST)
- Commercial Value Management (CVM)
We believe that these five “alt” suites could be larger than the source-to-pay market, possibly with long-term integrated leaders such as a SalesForce or ServiceNow in their respective markets-something that has not happened in the acquisition technology market to date.
In the coming weeks, the Spend Matters team will review these five areas where “alt” suites are showing the most momentum and are developing these concepts in more detail, examining the building blocks of technology and explore the vendors driving each other. .
As always, feel free to contact us directly if we can assist in identifying technologies, evaluating vendors or evaluating opportunities and tradeoffs in these and other areas.