Earlier this week, Coupa Software (NASDAQ: COUP), the San Francisco-based spend management solutions provider, informed us that it has purchased Cincinnati-based Aquiire, the real-time procure-to-pay (P2P) and supplier management solution provider (formerly known as Vinimaya) for an undisclosed sum. Ardent Partners analysts took a briefing with the Coupa team late Monday afternoon to learn more about the deal and how it will position Coupa in the larger B2B spend management solutions market. On the call were Coupa’s Vice President of Product and Segment Marketing, Ariane Lindblom, Coupa’s Director of Analyst / Influencer Relations, Rebecca Morris, and from the Ardent team, Founder and Chief Research Officer, Andrew Bartolini, Vice President of Marketing and Research Director, Robert Cohen, and Senior Analyst, Matthew York.
Deal Analysis
According to Ariane, Coupa’s interest in Aquiire stems from the latter company’s position as leader in the P2P and supplier management space, with its real-time catalog search capabilities and 13 patents awarded or pending for the technologies that drive its innovation (you can read Ardent’s analysis of Aquiire’s real-time P2P and catalog-search capabilities by clicking “Punching In” to Real-Time Procure-to-Pay with Aquiire” and “Aquiire’s Move to “Real-Time” Procurement“). These capabilities provide users with the ability to search locally-stored (hosted), cached, or web-based supplier catalogs in real-time and on one platform, or to “punch in,” rather than leave the platform or “punch out” to a supplier catalog or multiple third-party websites.
The Aquiire executive team, led by its President and CEO, Mike Palackdharry, had previously seen an opportunity for significant savings for procurement teams via the process of real-time competitive shopping. The Aquiire team believed that when a sourcing team locks in standard pricing with a supplier for a term of one year or more, it may miss out on better mid-period pricing caused by typical market fluctuations like oversupply, sales, and seasonality. For example, suppliers may offer pricing that is significantly lower than the market average in an attempt to gain market share, dump inventory, or increase quarterly revenue. These sale price opportunities are frequently missed by the traditional corporate buyer. To help its customers capture these opportunities (or at least be more aware of them), Aquiire developed a patented technology that presents requisitioners and buyers with a real-time view into market pricing by capturing a wider range of supplier pricing options.
With real-time pricing information, users can quickly see price fluctuations on a particular commodity or from a particular supplier (due to shifts in seasons demand, for example), and take advantage of the dynamic nature of the market. According to Aquiire, its customers have been able to save additional money (i.e., beyond the negotiated price) as a result of leveraging real-time pricing information, competitive shopping, and alternative supplier pricing (lower-priced suppliers for the same product at checkout) on its P2P tool. Aquiire also captures this pricing data in its Savings Analysis Tool.
By purchasing Aquiire, Coupa officials are looking to build upon what they consider to be the preeminent B2B spend management solution with the addition of a real-time catalog search and pricing capability that provides users with a more advanced buying experience than is typically found in the market today. Coupa officials intend to integrate Aquiire’s search and price shopping capabilities with their existing catalog search functions on the Coupa platform to give users this broader capability, as well as access to a greater number of suppliers that can integrate with Coupa’s platform. Suppliers will have the ability to manually update their catalogs, or simply catalog items, on a regular or rolling basis.
Coupa intends to incorporate Aquiire’s real-time catalog search capabilities within its own solution suite and offer this new search capability in 2019. Coupa will release more information on integration phases and timelines, including pricing, packaging, and their go-to-market strategy at a later date.
Going forward, Coupa does not plan to sell the Aquiire solution as a standalone offering. And, while there have been no plans announced as yet regarding the ongoing support of the Aquiire solution (and current customers), the Coupa team said that they will see no disruptions to their service. Additionally, the Aquiire leadership and staff are currently integrating with the Coupa team. As Ariane said, Aquiire was selected for its culture and Coupa leadership believes that they are a great fit.
Final Thoughts
Ardent analysts have been following Aquiire since 2006 and have tracked the evolution of its innovative and patented real-time catalog search technologies, which can add value to the B2B shopping experience in the form of increased efficiencies, enhanced user experience, and greater contract compliance and spend under management. The technology was and is impressive for a company the size of Aquiire. In many ways, Aquiire’s main challenges were linked to its size and the difficulty smaller companies have in scaling their sales and marketing operations. The Coupa acquisition solves this main problem. Pulling these capabilities in under the powerful Coupa sales and marketing umbrella and ultimately offering Aquiire’s capabilities within Coupa’s business spend management platform, should generate good traction and enable a larger number of customers and procurement teams to punch in and shop in a more real time, competitive environment.
At the user level, Coupa’s acquisition of Aquiire and integration of its real-time search (and price discovery) capabilities enables users to more easily find the best-value option among current choices offered to them in real-time and on a single platform.. These features can drive employee efficiency, satisfaction, compliance, and ultimately spend under management, as it will keep more transactions on the platform with preferred suppliers under established contracts and reduce maverick spending.
Technologies like Aquiire’s real-time catalog search are also among a broader class of data-driven technologies that leverage the power of Big Data for procurement to provide users with data-centric insights and efficiencies. They contribute to what Ardent Partners refers to as the “Age of Intelligence,” where users leverage “smart” technologies that not only enhance their experience, they also provide users with a cache of data-driven insights to help inform business decisions. Real-time data and information is a marque element of the “Age of Intelligence.” Coupa’s purchase of Aquiire and its advanced (and patented technology), as well as the integration of its real-time catalog search mates real-time data with Coupa’s highly usable shopping experience, making for not only a smarter B2B platform, but a more intuitive and usable one, too.
Disclosures: Coupa and Aquiire are clients of Ardent Partners. The authors hold no financial investments in any company mentioned in this article.
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