Ariba bought b-process. Is this the start of the e-invoicing land grab in Europe?

Ariba bought b-process. Is this the start of the e-invoicing land grab in Europe?

Posted by Pete Loughlin in Ariba Buyer, e-invoicing, e-Procurement, Electronic Invoicing, News 25 Oct 2011

I was taken aback. I really hadn’t seen that one coming. It wasn’t the acquisition by Ariba of b-process that surprised me though – it was the fuss that was made about it.

Purchasing Insight logoYou could be forgiven for not knowing of b-process. They’re a French organisation with some track record within the French market. More recently they’ve made a play at being global and have been successful in catching the attention of the analysts – Gartner in particular. I don’t want to downplay their significance. Revenues of $11m and a valuation of $35 million according makes this deal newsworthy, but compared to Ariba’s revenue of over $400 million (as at 2nd quarter of 2011) b-process is a minnow on the global stage.

So what is the real significance of this deal that’s caught everyone attention?

I agree with with Duncan Jones from Forrester who wrote about the cultural dimension of this acquisition in Procurement Leaders’ blog where he makes the point that “French enterprises … often pick suppliers like b-process that wouldn’t qualify for the long list if they weren’t also French”. The French are parochial and penetrating this market from outside can be a challenge. It’s a smart move for Ariba who are certainly eyeing the European market closely as e-invoicing regulations become more streamlined.

Who say size doesn’t matter?

For the vendors and e-invoicing is is a numbers game. Interoperability is fine if everyone plays the same game but going forward it will be the size of your network that counts and we’ll see more and more consolidation over the coming months and I think a few surprises too as the e-invoicing land grab steps up a gear.

 

  • Andrew Henderson October 27, 2011 at 9:34 am /

    I agree with you on the French aspect, having worked for a French business in the past, and the land grab too. It is noteworthy that there are so many mergers and acquisitions going on in the e-invoicing arena at the moment. The market is still very young and this sort of behaviour is more likely to be found in a maturer market. I have seen reports of over 100+ suppliers of e-invoicing systems and as numbers are king, buying up competitors when they are young (and cheap) looks like a natural reaction to the situation.

    As a relative newcomer to this area, I think the approach of most of the players in the market, selling proprietary e-invoicing approaches and technologies, is forcing this behaviour. By this I mean that most players are promoting exclusive solutions that do not inter-operate, so once you sign up with Supplier A you are locked into their particular technology, process etc. This means Religious Wars between advocates of A vs B vs C as each promotes their own “best” solution into the marketplace.

    No doubt someone will be along soon with a truly interoperable solution! This will be interesting to watch and see who wins out!

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