The Downside of Being the Biggest Fish in the Pond
I am noticing a marked tendency for very large clients of very small solutions vendors to eventually have a very sticky problem. The issue comes up when it’s time to renew a multi-year contract, when market prices have fallen significantly since the contract was originally signed. Seems it’s quite common for the vendor to try to renew the agreement at inflated prices. Is this any way to treat what may be your biggest and best client?
Think of the problem from the vendor’s perspective. If the fees you are paying make up a significant percentage of the vendor’s overall revenues, then offering a price reduction means that the vendor must be willing to take a big hit to the top line. I think many vendors would rather take the chance that the client is happy and won’t test the market before renewing – and thus maintain the higher level of sales. And if the client does look around, well then the vendor hasn’t lost anything, has it, except maybe a bit of good will. I have seen this happen several times during my tenure at Gartner – probably because, on the whole, prices for procurement applications have been falling.
This phenomenon is a good reminder that even when you have a wonderful relationship with your vendor, if you are a big fish in their small pond, don’t be tempted to skip your homework before resigning on the dotted line. Alas, a downside to working with small vendors. The old adage, “You get what you negotiate” is proven once again!
Basware has added a new position to its executive team – Vice President, M&A. Matti Copeland, a member of Basware’s board from 2008-2010, is assuming the role. Seems like a logical takeaway is that Basware is looking to acquire . . .
CVM Solutions announced a great 4thquarter. The supply base and diversity management solutions vendor said it signed on 10 new clients including Terex and Intercontinental Hotels, expanded its relationship with 20 clients such as the Kroger Company and Cigna, and renewed 28 customers including Lockheed Martin and BNSF Railway in the quarter.
In December, Mitratech, a Los Angeles-based provider of legal operations software, released a new version of its TeamConnect Enterprise collaboration suite. TeamConnect Enterprise 3.3 is an extensive suite of solutions that includes e-billing, matter management and contract management. For a great analysis of this release, which includes self-service reporting and export to Excel and .pdf, see this nifty Law Technology News piece.
Hubwoo announced its results for its year ending December 2010. Hubwoo’s attributed its 9% year-over-year increase in revenue largely to demand for cloud-delivered SAP SRM.
ePlus announced that it has won another intellectual property patent lawsuit for e-procurement functionality. This time, the suit is against Lawson. According to ePlus’ press release, ePlus is seeking a court ruling to stop Lawson from selling or supporting its e-procurement solutions. ePlus successfully sued Ariba a few years back and we’ve heard other vendors have settled with ePlus over the threat of lawsuit.
Upside Software rolled out UpsideLive LITE, a low-end version of its enterprise contract lifecycle management solution, for as little as $20 per month per user. Demonstration videos are available on YouTube. See the press release for the YouTube URLs.
Unimarket announced that it achieved 94% revenue growth in 2010, and added 21 new customers to its roster. The UK-based Unimarket provides e-procurement solutions to the higher education market. Clients include The University System of New Hampshire, The University of Canterbury, High Point University, Harford Community College, The University of Waikato, Carroll Community College, Goucher College, Massey University, Belmont Abbey College and Gettysburg College.
EchoSign was recently honored by SalesForce.com as its top-ranked AppExchange contract management application for 2010. With EchoSign, Salesforce users can create customizable drag-and-drop form fields and signature blocks, preview documents before sending for signature and create customizable alerts.
Global consulting firm PwC announcedthat it has listed Proactis, a UK-based e-procurement company, as a “top 100” UK software vendor in its Global Software 100 Leaders 2011 report.
Verian Technologies announced it will provide purchase-to-pay automation solutions to Norse Energy Corp. ASA, an oil and gas exploration and production with operations in the U.S. Norse plans to use Verian to improve visibility of cash commitments and budget status at the time of requisition, as well increased visibility and control over inbound invoices.
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