Monday, June 6, 2005

Software

Emptoris buys 80-person Indian spend analysis firm

By Ethan Forman

Supply management software company Emptoris Inc. has opened a passage to India with its purchase of Intigma, a company whose technology helps customers price out the cost of their materials and services.

The Burlington company did not disclose the purchase price of Intigma of Pune, India, located near Bombay. The corporate headquarters of the parent company, Intigma Holding Inc., is located in Menomenee Falls, Wis. Intigma specializes in spend analysis.

Emptoris had worked with Intigma for the past two years, said Avner Schneur, Emptoris's president, chief executive officer and founder. Its technology will be folded into Emptoris's software offerings, which helps companies improve their sourcing, and streamline their list of suppliers. It can also aid in negotiations, collaborations and compliance, the company says.

Emptoris has doubled its revenues and bookings each year since its founding in 1999, Schneur said, pegging the company's revenues in the "tens of millions of dollars."

The company grew its revenue by 138 percent last year. The purchase of 80-person Intigma takes the number of employees at Emptoris up to 225.

Big companies like drug maker GlaxoSmithKline and cell phone maker Motorola Inc. save hundreds of millions using its software, according to Emptoris and industry analyst firm AMR Research Inc. of Boston.

"We have had a lot of public recognition in terms of industry awards and in terms of companies winning awards," said Kevin Potts, director of product marketing. The news at Emptoris comes on the heels of a market forecast by technology research analyst firm IDC of Framingham, which predicted in May that the market for supply chain management software would be worth $6.2 billion worldwide in 2005, with $3 billion spent in North America.

Emptoris grew out of the creation of so-called e-markets during the dot-com craze, when it was thought that purchasing agents could simply search online for the light bulbs or circuit boards that they needed.

Turns out, sourcing is a much more complex task. "That model really did not work well for what it does. When you buy goods and services for companies, it's all about strategic relationships with suppliers," Schneur said.

Many companies might have multiple contracts with the same vendor, or many vendors might be supplying the same good and services. Emptoris's software and analytics helps companies focus its sourcing activities.

"Once you understand where you spend your money, you will start to streamline it," Schneur said.

The Emptoris software suite starts at $100,000 and a license can run into the many millions, depending on the size of a company, the number of transactions the suite handles, the number of buyers and other factors, Schneur said.

The software can also help a company comply with the Sarbanes-Oxley Act, new rules for financial disclosures, because customers can track the behavior of vendors.

On the venture capital side, Emptoris is not looking for more cash, but the company has attracted its share over the years.

In 2000, Internet Capital Group bought a stake in the company for $20 million. In January 2003, the company netted a third round of $20.5 million led by Menlo Ventures along with the company's prior investors.

In December, the company attracted another $12 million from investors.

"We are not looking for any funds right now," Schneur said. "At this point we are primarily focused on really growing the company."

The purchase of Intigma is not the first for Emptoris. In January, the company bought ValueEdge of Lexington, a supplier assessment software company. In 2003, Emptoris bought spend analytics firm Zeborg Inc. of New York.