A few weeks ago I was speaking to a salesperson for one of the major eSourcing toolset providers (disclaimer: NOT Ketera), and I asked them if they ever heard of WhyAbe.com.

The response I received was somewhat surprising.

“Everybody has heard of WhyAbe”, the sales person said.

“Every time I go into a new customer, the first question I get is why should I pay for it when I can get it for free.”

The conversation could not have been timelier given the recent posts on Spend Matters regarding Ketera’s future, where the company “has truly gone out on a limb with a new philosophy and strategy”.

So what’s new at Ketera? You can check out Spend Matters for the details (Part I, Part II), but to summarize, Ketera is combining on-demand sourcing tools with a supplier directory network and online storefronts.

The question I have is what’s new about this?

Or I guess, the more adept question is what drove Ketera to make these changes – was it truly innovation and a broad understanding of the future needs/wants of the buyer and supplier community, or was it more of a reaction to shifts that happened a long time ago?

Which takes me back to my original point. The only thing I can see Ketera doing differently is charging (buyers and suppliers) for this on-demand resource. The rest already exists.

ThomasNet.com has had ThomasNet RFP Manager available to buyers for over a year now. The toolset doesn’t have all the P2P bells and whistles that the major players offer, but it does offer one of the most extensive supplier directories ever created, as well as sourcing tools and contract management. The site also has a ton of other resources that buyers can use, and the Thomas name has sell-ability to most the supplier community. The reason Thomas gets so much traffic (as well as name recognition) is that the information and tools it provides are on-demand and free to the end user.

ThomasNet RFP Manager is powered by WhyAbe. WhyAbe on its own doesn’t have half the name recognition of Thomas, and therefore its supplier directory is not nearly as extensive, but it’s growing every day. Besides the basic sourcing toolset, WhyAbe also offers contract management for buyers, and storefront capabilities for suppliers, all for free.

Admittedly, when Jason Busch was getting his first Tradex briefing back in 1998, I was in college learning how the Internet would change the way business was done, making B2B commerce faster, more efficient, and cheaper. It was also supposed to give us better information. What we’ve learned since then is that web-based models that provide information only work when they are free (unless that information is not readily available elsewhere). The sites and portals that got the Internet right (Google, Facebook, etc) understand that end users don’t want to pay for content.

What Ketera doesn’t understand is that buyers see supplier directories and pricing data as information, not to be paid for but to be used as an aid when deciding how much to pay. Storefront technology and all the other P2P enhancements may make the transaction process more efficient, but in a sense its apples and oranges. Very few companies are going to build their entire business process on top of an on-demand tool from a company that has a tendency to shift strategies as the wind blows.

The new pay as you go model Ketera “developed” also has a supplier-side revenue stream which means yes, Ketera is now getting paid from both sides. How long will suppliers continue to pay when they find out buyers are using their information to benchmark pricing and negotiate down costs? Probably not too long. And how long will buyers pay for a system where the only suppliers in the directory are the ones that pay to be there? It’s tough to justify buying biased data when there are so many unbiased sources available.

Sure the new Ketera platform will be less expensive than the old model, but it’s still not free, and that’s where the concept will have difficulty succeeding.
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Joe Payne

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