SciQuest’s acquisition of CombineNet and The Big Bang Theory (Part 1 of 2)
In my July 10th, 2013 post “Forrester’s Duncan Jones and His Big Bang Theory Relating to Market Evolution” I had made reference to Jones’ comment regarding the IBM acquisition of Emptoris.
Specifically his remark that it was “too early to expect IBM to have coherent plans for what to do with its (re Emptoris’) services procurement product.”
I of course did not agree with the totality of Jones’ position as it appeared he was suggesting that “acquisitions such as the one made by IBM when they acquired Emptoris are largely intuitive and representative of a nebulous fear of falling behind as opposed to being a reflection of a deliberate, forward thinking strategy.”
Here we are a couple of months later, and with news of SciQuest’s acquisition of CombineNet, one might wonder if Jones was more on the mark with his Big Bang Theory than I gave him credit for. After all, and as someone who has covered SciQuest since 2004 when they were a company whose expertise was centered on the acquisition of scientific equipment for higher education institutions, you would be excused if you could not find a cohesive pattern of evolutionary development.
Let’s face it, how do you go from the precipice of financial oblivion per the company’s declining fiscal performance in 2004 to being in the position to acquire another company for $26 million in cash. Yes I know the total deal is worth $43 million dollars but outside of hard cash I have never put much merit in acquisition-driven stock transfers. GAAP elasticity as I call it is one of the reasons for my cynicism regarding stock transfers – but that is a story for another day.
Or to put it another way, is SciQuest where they are today based on a deliberate design, or simple Forrest Gump wind of fortune luck . . . or a combination of both?
In Part 2, I will dig up in Ancestry.com fashion, my findings from a 2005 white paper I wrote on SciQuest to see if we can connect the dots relating to the recent CombineNet acquisition.
In the meantime let me leave you with the following question to ponder; if indeed SciQuest’s evolution is more by chance than design, what does it do in terms of either building or undermining mid to long-term confidence in the company’s direction and prospects for success? Even more importantly, what does this say about the future prospects of all players in our industry?
Perhaps some of the answers can be found in the 2005 SR&ED Report on the eProcurement Software Industry?
To continue on to part 2 of this series, click here.