The announcement that Concur (CNQR) will be bought by SAP for $8.3 billion highlights an incredible story. Congratulations to the entire CNQR team on an unbelievable run over the last 15 years.

The company’s story comprises many lessons, I will highlight just two:

  • The importance of sticking to your knitting and the benefits of specialization
  • The initially painful, but ultimately rewarding transition from behind-the-firewall to SaaS

Recall that Concur briefly flirted with competing with Ariba and pulled back, instead choosing to focus on T&E.  Also recall that Ariba, IBM, and SAP all had T&E modules during this entire time frame plus procurement modules, and in Ariba’s case a network. On the surface, Concur with its fledgling point solution seemed unlikely to flourish.  But, Concur stuck to the T&E world, integrated with credit cards, bought an online booking tool and made the transition to SaaS earlier than anyone who did not start out that way.

Recall also that Concur did all of this while being a publicly listed company.  In fact, when the B2B bubble burst in 2000, the company spent the next two years (while they were making the SaaS transition) with a market cap of under $100 million!  Fast forward 12 years later and they sell for $8.3 billion, or more than 1.5 times what SAP paid for Ariba.  That’s why I say nothing but respect for Concur!

Tom Russo, a great value investor, talks about how few companies are willing to make long-term investments that will disappoint the market in the short-turn and thereby risk losing control of the company as the stock price drops.  Concur ran this gauntlet and came out the big winner.

Now watch for the PE and VC firms to try to identify the logical #2, non-ERP player: Coupa, Certify, Chrome River, ExpensePoint, Mindsalt, Nexonia, Deem, or others!


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