3 reasons why Basware’s acquisition of First Business Post is big news

3 reasons why Basware’s acquisition of First Business Post is big news

Posted by Pete Loughlin in e-invoicing, Electronic Invoicing 23 Jan 2012

Last week, Basware announced the acquisition of First Business Post, one of the most important players in the e-invoicing market in Germany. I didn’t see much noise made about this which surprised me. This is big news. It’s big news for three reasons.

Purchasing Insight logoConsolidation of the e-invoicing market

There are over 500 e-invoice service providers in Europe. It doesn’t take a visionary to suspect that consolidation is going to happen at some stage but the acquisition of Cross gate by SAP and Ariba’s move on b-process heralded what we predicted last year  was the start of the consolidation wave. (Is this the start of the e-invoicing land grab?) Basware’s purchase appears to confirm that the consolidation has begun.

Germany

We’ve written about the significance of Germany before. (Electronic Invoicing- what’s so important about Germany.) Germany is the largest economy in Europe.  In terms of IMF GDP figures, the European Union is the largest economy in the world generating € $11,808 billion (2009) and Germany has the biggest GDP by far at €2,409 billion. They have the strongest economy in the Eurozone (although, in fairness the bar isn’t that high just now). Being the dominant e-invoicing service provider in Germany is a big deal and, according to Basware’s press release,  that’s exactly what Basware have become.

The open argument

The third reason why this is big news is that it makes a very big statement about openness.

There are two types of e-invoicing network. Open ones where interoperability is allowed or encouraged, and closed networks where buyers and sellers have to subscribe to the same network. The closed networks, most notable Ariba and OB10 (they wouldn’t use this term by the way), have been able to point out that the size of their networks as well as the strength and longevity of their infrastructure makes them the network of choice for some of the biggest organisations in the world. In contrast, the open networks are a collection of smaller players that rely on their collective size for credibility.

This view has for a long time held some sway but not for much longer. The Open Network, Basware claims, now has 130 interoperating networks globally, with approximately 120,000 active buyers and 495,000 suppliers transacting worldwide. That’s not a ragtag of small players. That’s a force to be reckoned with.

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