There was important news in the B2B supply chain technology sector with the announcement from Liaison Technologies that it was acquiring software-as-a-service (SaaS) based business process integration provider Hubspan for an undisclosed amount. While functional procurement, B2B fulfillment and supply chain teams might not be totally familiar with the names of either of these vendors, they are certainly familiar with the business processes each supports. Hubspan alone provides integration platform services for a number of other technology providers including Ariba, NetSuite and industry specific trading exchange Ecostar. Within Ariba, Hubspan provides the support for enabling suppliers to integrate into the Ariba network.

Last week, Supply Chain Matters had the opportunity to speak with Bob Renner, President and CEO of Liaison Technologies and we were able to gain a better understanding of the strategic aspects of this acquisition. Hubspan was an important player, especially for some of the larger enterprise software providers, and the open question is how Liaison moves forward in a rather complex set of market challenges.

Both companies have existed in the multi-tenant B2B cloud technology support arena since 2000, but with different capabilities.  Liaison’s roots reside in supporting complex data management, B2B messaging, application-to-application and data integration capabilities.  CEO Renner describes Liaison’s technology capabilities as data integration and B2B messaging wrapped around supply chain processes. Hubspan, on the other hand, has pursued a mainly behind the scenes channel strategy in supporting the onboarding and last mile integration supplier networks. This provider also supported the PCI DSS information security standard for supporting secure credit transactions.

Both the Liaison and Hubspan CEO’s have known each other for the past several years and the acquisition appears to be one of timing. Both companies took on complex integration as core competencies but with different industry penetration and go-to-market strategies. CEO Renner boasts that the combined capabilities of both companies allow Liaison to be a scaled player in mass customization and to serve as “the Starbucks model of B2B integration.”

The combined roadmap calls for both the Liaison and Hubspan technology support capabilities to be rolled under a single Liason brand, but individual product branding may vary. There are plans to harmonize each platform’s data mapping needs into a single architecture and layer on common visibility tools. Renner notes that Liaison itself has had previous experience in the integration of other company capabilities with Hubspan representing the 9th acquisition. He seems very confident that for customers of both companies, any appearance of change will be minimized through use of proven in-house integration tools.

With this acquisition, Liaison faces strategic and business strategy challenges. While the industry penetration strategies for both Liaison and Hubspan appear complimentary, further industry penetration is dependent on higher market visibility, not only for the CIO and IT infrastructure affiliated community, but to the business and functional supply chain community. Liaison must now compete with well recognized enterprise technology brands and provide a differentiating thought leadership and technology value-proposition. There are also stand-alone players such as GXS that will offer competition in this segment.

Providing some key technology components for other B2B market players introduces a different focus of market coopetition and/or co-existence.  Many of the larger enterprise software vendors such as IBM, Oracle, and SAP have executed acquisitions of B2B integration vendors to broaden support for complex B2B supply chain networks and to secure a path for future revenue growth.  SAP with its announced its acquisition of Ariba, will be the first to determine a coexistence strategy with Liaison in the market.  An open question is whether SAP will elect to emphasize Crossgate and/or Hubwoo as the supplier integration engine for Ariba, in the post-integration deployment. This author is of the view that the ongoing market interest in supply chain control tower or next generation S&OP decision-making support capabilities will precipitate the morphing of B2B and business intelligence technologies into combined predictive capabilities.

As is often the case, customers and the market will determine the ultimate scorecard of the coming together of Liaison and Hubspan. For existing end-user customers, the combination of both platforms includes a promise to provide deeper and broader business process, B2B messaging and data integration options. We sensed lots of confidence in the ability to execute an overall integration of combined capabilities. However, this acquisition places Liaison in the cross-hairs of much larger market players with deeper pockets. Time, bold leadership, more visible branding and the market will determine the long-term outcomes.

Supply Chain Matters will continue to monitor the broader B2B business process and technology enablement landscape arena so do keep us in your places to visit on the web.

Bob Ferrari