I just saw a very interesting news piece on the wire: Selectica announced that it had landed Sun Microsystems as a new contract management customer. The piece didn’t say that Sun Microsystems was a marquee customer of Nextance, a Selectica competitor and a pioneering contract management vendor that was acquired by Versata last fall. I’ve been watching for signs of how the Nextance-Versata merger is going, and certainly this is not an encouraging event, although without doubt there is more to the story. In the upcoming MarketScope for Contract Management 2009 (now moving towards final edit here at Gartner and subscription required), Nextance was downgraded from a Positive to a Promising due in part to some concerns over the business since the acquisition.
The other interesting angle on this story is that Selectica has won a notable new account. Selectica did not make our report this year because we required demonstrated global traction, and Selectica has almost an exclusively American customer base. Moreover, Selectica has been struggling financially, with revenues for its quarter ending June 30, 2008 declining from $4.3 million the prior year to $3.76 million this year, and a loss in cash flow from operations of $1.7 million for the same quarter. (Selectica’s numbers for its quarter ending September 30 2008 have not yet been released.)
My take on this deal is an interesting shift of business from one vendor we are watching with some concern to another vendor we are watching with some concern. Chalk one up for Selectica with a new hash mark in the “encouraging” column.