SAP acquires Frictionless Commerce

One of my fellow bloggers, Jason Busch, who authors Spend Matters, had this to say earlier this week:

My focus will be on analyzing SAP's SRM and SCM strategy and products, as well as the NetWeaver partner ecosystem, especially as it pertains to developments in the Spend Management arena (including a forthcoming announcement involving Ariba that was already leaked on the main-stage at Ariba LIVE).

Well, Jason is in for a big surprise when he gets in from Chicago this morning. SAP has announced the acquisition of Frictionless Commerce, a provider of supplier relationship management (SRM) software based in Massachusetts.

No details yet on the financial terms, although it was an all-cash transaction. My understanding is that Frictionless was running at the $10-$15mm run rate and had turned a slight operating profit in its most recent quarter (but not for the full year 2005).

This deal makes sense as SAP's existing sourcing efforts weren't as strong as some of the stand alone offerings out there like Ariba (ARBA) and Emptoris. Frictionless, who had good products but has struggled to scale the business (and had been looking for a suitor according to industry analysts) had become a certified NetWeaver partner earlier this year. Oracle arguably had an edge in SRM and spend management, and this acquisition potentially closes that gap.

Related Posts:

• UPDATE: Jason Busch weighed in with his analysis of the Frictionless deal and the impact on the sourcing/spend management ecosystem
• New OnDemand SRM Offering through Acquisition of Frictionless Commerce (Zoli Erdos)
• SAP Continues to Build out SRM Ecosystem (Jason Busch)
• Don't Count Out Frictionless Commerce Yet (Jason Busch)

SAP software sapphire06 frictionless enterprise 2.0 woodrow m&a srm spend management

Note: At the time of this writing I, and/or funds I maintain discretionary control over, maintained long equity positions in SAP and ORCL but did not maintain a position [long or short] in ARBA.

Comments

[SAP Transaction Codes]

I am just courious if there is much traction for NetWeaver within the enterprise community. I mean, i hear that it's a good product but I havent heard of many enterprises actually implementing it. Any thoughts?

Zira