Emptoris Inc., provider of procurement strategic supply and contract management technology today announced that it had acquired Xcitec, a Munich based provider of strategic supplier management software.  Financial details were not disclosed and the transaction has recently been completed. This acquisition comes on the heels of a previous acquisition of Rivermine in January.

The announcement makes note that this new combination promises to provide a single offering that manages all of the business processes associated with supplier on-boarding, qualification, risk assessment, performance management and rationalization.  That may well prove to be significant as the competitive landscape of procurement and strategic supplier management continue to heat-up.  This is all good news for technology buyers.

Supply Chain Matters was briefed by Emptoris senior management regarding the acquisition, and it is our view that this acquisition will both broaden Emptoris’s capabilities in larger scale supplier lifecycle management deployment needs as well as provide broader appeal to the SAP Procurement and SRM customer base.  Emptoris has had its eye on the supplier management space for over two years, and it was the influence of joint Emptoris/Xcitec customers that brought these parties together. The acquisition further strengthens Emptoris’s influence in Europe, along with its abilities to support multinational and multilingual process needs. We would also anticipate that this acquisition will strengthen Emporis’s penetration in manufacturing related industry, where strategic supplier management is a very big deal, and where in-house management of suppliers is viewed as more strategic.

The timing of this acquisition could not be better for two distinct reasons.  The recent series of industry supply chain crisis brought about by the recent earthquake and tsunami in Japan has brought keener awareness to the overall importance of supplier lifecycle management and risk assessment.  Second, competitors to Emptoris including Ariba and SAP have each been very active of late in enhancing supplier management process support capabilities. B2B network providers such as GXS have also become more active in augmenting supplier management and collaboration capabilities. SAP has especially been active in trumping supplier management activities through network capabilities provided by network providers Hubwoo and Crossgate.

Xcitec’s market visibility has been primarily in the European region where it has targeted and assumed 36 percent of DAX-listed companies.  This provider has garnered recognizable manufacturing and services customers such as BASF,  Deutsche Telekom, Deutsche Post DHL, EADS, ThyssonKrup, Siemens and Vodafone, among others, many of which share a large global  supplier base with over 100,000 users. These customers also share a strong SAP installed base and integration presence.  Xcitec technology can be deployed in either an on-premise or SaaS model, but the current majority of installations are on-premise deployments.   Xcitec’s technology platform is SOA and web-services based, and boast of integration with SAP ERP backbones via both supplier and purchasing portals or through the SAP Enterprise Portal.  Xcitec has also achieved Powered by SAP NetWeaver certification.

Xcitec’s existing team is now a part of Emptoris and  co-founders Martin Berr-Sorokin and Uwe Krieger will also join the Emptoris executive team. Berr-Sorokin is designated to be SVP and GM of Supplier Management and Krieger will assume VP of Development and Operations for Supplier Management. Emptoris also plans to continue to offer Xcitec’s strategic supplier management technology on a standalone basis, or as part of the Emptoris applications suite.

Customers with needs in strategic supplier management continue to gain more options and this recent Emptoris acquisition will certainly add more competitive dynamics to this sector. Emptoris customers should view this acquisition as yet another positive step in deploying a broader set of sourcing, contract management and now procurement intelligence and supplier management capabilities.  We would not be surprised at all to be commenting on further Emptoris acquisitions in the coming months.

Bob Ferrari