One of the best scholars on the subject of platforms is Marshall Van Alstyne of MIT. Van Alstyne coined a phrase I love: “platforms always beat products”. For example, the iphone or ipod with their app stores and itunes respectively beat pure products that tried to go solo without ecosystems (other phones and MP3 players).
Van Alstyne has a great chart, reproduced below, proving many of the most valuable brands in the world are now platforms. Three of these brands: Amazon, IBM (not exactly clear what their platform is), and Google presented last week at the Global Procurement Technology Summit sponsored by Spend Matters and ISM. It was quite a show!
At the Global Procurement Technology Summit, IBM gave the same “we-have-transformed-our-procurement-so-we-can-help-you-transform-yours” speech they have been giving since 2000. This pitch is quite good if you are the size of IBM and want to use service-heavy, customized solutions or you want to outsource your procurement to them. IBM is certainly not pitching light touch, SaaS solutions or highlighting the use of them internally! (Only Emptoris was mentioned in this regard.)
The IBM presentation demonstrated cool uses of data aggregation and analytics for supplier and price analysis, contract extraction technology (think Seal Software or Legalsifter.com) as well as use of Watson to help guide procurement. The highlight of the presentation was a future-oriented demo of Watson helping guide the purchase of an indirect item using voice recognition, some item-specific questions, and product attributes. IBM was clear to say this application did not yet exist, but someday would. All I could think was IBM better hurry. If Amazon ever decides to let Alexa loose on the AmazonBusiness side of the house, it will be quite a race.
AmazonBusiness makes a pretty compelling case that it can deliver the “Amazon-like” buying experience corporate buyers crave!! Amazon made it clear it is starting to get serious about the business market by talking about workflow, business pricing, contracted pricing, analytics, and most important, invoicing. (After all procurement cards and credit cards can only go so far.) (Subsequent to the Global Procurement Technology Summit, Amazon was also rumored to be considering a bid for Office Depot and Staples’ corporate business!)
Amazon’s pitch will eventually be really compelling: give users exactly what they want—rich easy search, ratings, and comparisons on attributes, but also give corporate procurement what they want. Amazon also makes the case they are a true marketplace with their pulse on competitive pricing, so why would a procurement organization spend any time on the categories they cover? Why not also work to consolidate your long-tail of vendors with them? It sounds like a few folks may already doing this with them.
Taken together, these two presentations at the Global Procurement Technology Summit made it clear the future of procurement is going to quickly involve the buzzwords and capabilities of machine learning and AI. Especially in indirect procurement with well-defined items and attributes, the game will no longer be about search, it will be about recommendations that take into account the user’s needs, product attributes, and company policies.
Oh, and what about Google you ask? At the Global Procurement Technology Summit, Google ended up briefly discussing how they use Salesforce.com (or Force.com) to manage their RFQs internally. Think of each RFQ as a sales “opportunity” and you get the idea. Imagine though if Google turns their sights to B2B, wow will that be a battle! Google would show you Amazon’s consumer price, Walmart’s, Staples, etc. and that of other retail vendors. Not clear, though, they will ever get access to business prices, but some day we can hope B2B will be as transparent as B2C!