Vendor Management

In 1991, Phil Zimmerman created Pretty Good Privacy (PGP) a public key cryptographic program and released it to the world for nix. Along the way, he attracted the attentions of the US Federal Government (bad for Phil) and some major corporations with plenty of cash (good for Phil). He sold PGP to Network Associates for a bucketload of cash.

It was an important episode in the history of the web because it showed how quickly a good application that addresses a significant problem can spread globally when distributed at a reasonable cost.

The key word in the previous sentence is ‘addresses’. Phil realised that security, like procurement, can never be perfect; and that the closer one gets to perfection, the tougher the going gets. So he created his application to be what he considered to be good enough rather than Perfect.

In my opinion, there are similarities between the current state of the procurement market and the state of security application market in 1997. Procurement tools have been getting increasing sophisticated over the past 10 years and now allow sophisticated users to achieve impressive results after making a significant investment. But, like security in 1997, has technology advanced sufficiently to allow new competitors to quickly create procurement tools that are good enough for the majority of users? I’ve believed for some time that Coupa and MFG.com are prophets foretelling significant disruption in the procurement market and today’s announcement on Jason’s blog of the new $39.99/month sourcing suite from Ketera is yet another sign.

[Note: The key to disrupting the market is getting a match between the software developer's idea of 'good enough' and the user's idea of 'good enough'. WhyAbe's failure to achieve this match explains its failure to disrupt the market - it simply isn't good enough. Let's hope Ketera is.]