(NASDAQ: CNCR) announced its Concur Business Advantage to provide leveraged
buying services to small and mid-sized companies, up through the Global 4000.
The first suppliers will be available on the network in Q2 of 2000. The network
is a strategic partnership between Concur, Nortel Networks, SAFECO, and Microsoft.
Networks (NYSE/TSE: NT) will offer a managed service solution to its 15,000
service provider customers, allowing them to quickly offer the Concur Business
Advantage and Concur eWorkplace business portal on an ASP basis. This arrangement
had been previously announced; one new feature is that Nortel Networks will
be making an equity investment in Concur.
(NASDAQ: SAFC) is a Fortune 500 insurance and investments company. Its more
than 17,000 independent agents and investment advisors will be offered the opportunity
to sell Concur products. In addition, SAFECO will be the exclusive supplier
of insurance and business equipment lending offered through Concur Business
Advantage, and will also supply investment products through the network. SAFECO
currently has 500,000 small and mid-sized business customers.
Networks and SAFECO will invest a total of $35 million in Concur, and will receive
warrants to purchase additional shares of Concur stock based on future performance
of the network.
(NASDAQ: MSFT) will offer technical expertise to the project. Concur Business
Advantage is built on the Windows 2000 operating system.
related announcement stated that Insight Enterprises, Inc. (NASDAQ: NSIT) will
be the preferred supplier of computer products from Compaq Computer Corp. Other
premier providers include Corporate Express, Contact East, Barnes and Noble.com,
GetThere.com, and Software Spectrum.
of the Concur Business Advantage will take advantage of volume discounts that
are assured by the presence of Nortel Networks and SAFECO in the network, and
will enjoy additional discounts from some of the suppliers recruited for the
was once apparently aiming to be Avis to Ariba's Hertz. With this announcement
the company has clarified its focus and is now well on its way to being number
one in a slightly different, but hardly less important, market. As Ariba and
Commerce One aim their enterprise sales strategy toward the largest corporations
- while leaving smaller companies to be serviced by ASP's and third party providers
of corporate portals, Concur has jumped in to cover everybody that the big two
big news in this announcement is the involvement of SAFECO. Whether it will
work out to have insurance salesfolk selling E-procurement systems remains to
be seen, but we think there is a reasonable chance of catching a good deal of
small company business through that channel.
even before the votes are tallied Concur's competitors will certainly begin
to think along the same lines. There are many industries that maintain regular
sales contact with small and mid-sized businesses, ranging from Baby Bells to
the people who stock the water cooler, and Concur's competitors will be looking
to strike some deals with them.
concept of an E-procurement system being sold by an insurance company shows
the extent to which American business dreams of reaping the benefits of technological
solutions without the pain of "becoming technical." And Concur's use of SAFECO
to sell to these companies is an excellent way of telling them that their dream
can come true.
However, while Concur may find that signing up the local box factory is an easy
sell, what with SAFECO to do the selling and a Nortel Networks client to provide
the service, we suspect that the real make-or-break issue will be signing up
mid-sized companies that have enough existing technology for the sale to require
a more targeted sales team and back-end integration.
a speculative note, this announcement may presage something new in American
(and world) business. While Concur claims an open network that allows for quick
and easy addition of vendors, it is clear that signing up for Concur Business
Advantage essentially means signing up for a slate of suppliers. We expect that
suppliers that offer extra discounts to Concur Business Advantage customers
or who have other kinds of partnership with Concur will get prominent positioning
on any catalog search. So, because of the economic value itself and the way
that results are displayed in the system, most customers will tend to buy from
the premier partners in Concur Business Advantage.
next company to set up a similar network will have a competing collection of
premier providers. The business of the (near) future may not have the freedom
and complication of dealing with individual suppliers, but instead by choosing
an E-procurement network have many of its key choices circumscribed. This may
lead to the networks becoming entities that support or police their members.
Today it may take a science-fiction author to predict the ramifications, but
that author had best write quickly to avoid becoming a historian.
A user considering Concur's solution in E-procurement will look at a number
of factors when comparing vendors. Those related to this announcement are the
number and quality of suppliers on the network, the current prices and pricing
structures, and the ease of implementing membership, including any backend integration
that might be called for.
those smaller businesses that may not need backend integration, the ability
to achieve large volume discounts has to be attractive. Such businesses in particular
should get Concur's assistance in doing an analysis of their potential savings
from using this network. If the suppliers are as good as the ones you now use
and the savings are significant, it will be hard to come up with a reason not
to join the network when it becomes available. For such companies, a membership
in Ariba or Commerce One's portals though a third-party provider may not offer
the small business focus that will be most useful to you.
companies will have to take into account integration costs and should also consider
that they are buying a piece of a corporate portal rather than a single application.
Look at the suitemates in the offerings from Concur, Peregrine, Remedy, and
others, to pick the collection that seems best for your total business strategy.