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Marlin Equity Partners Invests in Emptoris (Beyond the Headlines Commentary)

Written by: Jon Hansen

Article Overview: Los Angeles, CA, January 20, 2009 – Marlin Equity Partners is pleased to announce that it has made a significant capital investment in Emptoris, Inc., a leading global provider of enterprise supply and contract management software. What does it mean to the industry as a whole, and why should the Oracles and SAPs be concerned? (A Commentary)

Marlin Equity Partners Invests in Emptoris (Beyond the Headlines Commentary)

Los Angeles, CA, January 20, 2009 – Marlin Equity Partners is pleased to announce that it has made a significant capital investment in Emptoris, Inc., a leading global provider of enterprise supply and contract management software. Headquartered in Burlington, Massachusetts, Emptoris’ software and service solutions are used by Global 2000 companies in more than 75 countries across a wide variety of industries. Emptoris is consistently recognized by independent research firms as providing the market’s most robust and proven supply and contract management software solutions.

According to Avner Schneur, Chief Executive Officer of Emptoris, “Marlin and Emptoris have a shared vision for investment in the development of world-class solutions, and believe that this commitment will help drive further market penetration and growth for the company. I am particularly excited and proud that a late-stage investor such as Marlin, with specific experience in fast-growing mid-market technology companies, has invested so significantly in the company. Emptoris’ position as a leader in enterprise supply and contract management software will be greatly enhanced by this partnership and investment.”

“Emptoris has a track record of success in a fast-growing market, a healthy roster of blue-chip customers, award-winning and market-proven solutions, and world-class management and software development teams. Given our investment focus, expertise in enterprise software and financial capacity, we are confident we will bring the experience and resources that Emptoris needs to achieve its long-term growth objectives,” stated Nick Kaiser, Partner at Marlin Equity Partners.”

According to one recently published independent research brief, “While other vendors are seeing sales halt or slow significantly, Emptoris has continued to increase its new client list and has a customer retention rate greater than 90 percent. In fact, Emptoris grew revenue an impressive 20 percent in 2008.”

Beyond the Headlines (Commentary)

Emptoris Inc. has recently become a sponsor of the Procurement Insights Blog, and over the next few days I will be posting the first of two profile articles on the organization.

That said if you look at this investment from an Emptoris only perspective, you will lose site of the overall Marlin vision and its broader implications on the industry as a whole. This is not a singularly focused, myopic transaction but is instead a reflection of a dynamic synchronization of the complimentary elements of a total solution.

Reminiscent of the micro-organizational concept that was first introduced in the early nineties, in which there was a gradual movement away from the assimilation mindset that dominated the majority of mergers and acquisitions, Marlin’s strategy is based on the modular assembly of the best of breed solutions that are capable of both individually as well as collectively delivering unparalleled value to an increasingly cynical and equally demanding market. (Note: for those of you who may not be familiar with the micro-organizational concept, the premise upon which it was based centered on the belief that the practice of absorbing a recently acquired entity into the monolithic culture of the main company ultimately stifled the innovation and long-term profitability that made the organization an attractive acquisition target in the first place. Oracle’s more recent purchases of JD Edwards and PeopleSoft, and the negative response from those vendors’ existing client base gives testimony to the inherent flaws associated with a “grafting” strategy that is driven by a compliant (nee absorption) versus complimentary relationship. And while Marlin is making an investment in versus an acquisition of Emptoris and the other vendors in its existing panoply of advanced capabilities, the central organization’s emphasis of enhancing the development of the entities it has funded ensures that the individual and collective strength of the the total offering will continue to be both vibrant and relevant.)

This plug and play modularity, which is also reflective of the current Metaprise operational platform empowers each entity such as Emptoris to grow and prosper within their specific area of expertise while simultaneously enhancing the overall effectiveness and profitability of the Marlin “vendor enterprise or portofolio” as a whole. This again is in sharp contrast to the sequentially horizontal structure implemented by traditional enterprise software companies, who attempt to assimilate the solutions of acquired entities into their existing application framework. In essence, where the Marlin structure delivers consistent value to the end user through a collaborative effort, an Oracle will look to extract the perceived missing pieces of their main product offering from the target company, only to discard what is seen as being the non-compliant elements of both the solution and the organization itself.

Ironically, the latter’s static (or stagnate) approach to “integration” is also reflected in the absence of robustness in their existing technological platform, causing them to attempt to bridge the predictable chasms in performance through the introduction of band-aide fixes such as Service Oriented Architectures (SOA). With the continually high rate of e-procurement initiative failures – according to several studies approximately 85 percent of all ERP-centric programs fail to deliver the expected results – it is clear that this approach does not work.

As a result, the market is earnestly searching for a viable alternative. With the addition of the Emptoris offering combined with Marlin’s “investment focus, expertise in enterprise software and financial capacity,” the equity investment firm has assembled a formidable team that now provides that much sought after alternative both on an individual as well as a collective basis.

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Article Tags: burlington massachusetts, chief executive officer, chip customers, contract management software, customer retention rate, emptoris, equity partners, focus expertise, growth objectives, independent research firms, investment focus, leading global provider, management software solutions, market penetration, market technology, proven solutions, software development teams, stage investor, world class management, world class solutions



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