Gartner Blog Network

Sun Gives the Nod to Selectica

by Debbie Wilson  |  November 11, 2008  |  4 Comments

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.   

Category: contract-management  the-business-of-software  

Deborah R Wilson
Research Vice President
8 years at Gartner
15 years IT industry

Deborah Wilson, a Gartner research vice president, covers procurement strategies and applications. Her areas of interest include procure-to-pay, e-marketplaces, e-sourcing, spend analysis, services procurement and supply risk assessment. Read Full Bio

Thoughts on Sun Gives the Nod to Selectica

  1. Michael Fishkow says:

    As someone who makes his living integrating and customizing Nextance software, this news is disturbing, but not surprising. Like many Nextance customers, we hoped the Versata acquisition would bring new capital, and with it customer-driven product enhancements and better product support. That doesn’t seem to be happening.

    Sun was one of Nextance’s first big-name clients. I’d be very interested to know more about Sun’s decision criteria. Why did they switch? Were they attracted to Selectica or were they running from Nextance?

  2. Nobody says:

    “Selectica did not make our report this year because we required demonstrated global traction.”

    Gartner didn’t make it into our budget for 2009 for precisely this type of decision.

  3. Debbie Wilson says:

    Thank you for your comment, Nobody. It’s a good reminder to readers that Gartner does not have a pay for coverage business model.

  4. kkkr says:

    The behind the scene story is that Versata is in a legal tangle with Sun over some patent infringiment rights and i see that as the bigger reason for choosing Selectica as their contract mgmt vendor

Comments are closed

Comments or opinions expressed on this blog are those of the individual contributors only, and do not necessarily represent the views of Gartner, Inc. or its management. Readers may copy and redistribute blog postings on other blogs, or otherwise for private, non-commercial or journalistic purposes, with attribution to Gartner. This content may not be used for any other purposes in any other formats or media. The content on this blog is provided on an "as-is" basis. Gartner shall not be liable for any damages whatsoever arising out of the content or use of this blog.