On the Radar: EMC Supplier Exchange
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1 On the Radar: EMC Supplier Exchange Addressing key issues for managers of complex contracts in energy and engineering Reference Code: IT Publication Date: 11 Jun 2014 Author: Warren Wilson SUMMARY Catalyst EMC has announced the first offering on its new multi-tenant, public cloud architecture: a service called Supplier Exchange to help customers in the energy and engineering industries manage complex contracts involving multiple suppliers and vast numbers of documents. Scheduled for release in the third quarter of 2014, the new service will help EMC achieve two of its top strategic goals. One is to build a business in subscription-based software-as-a-service (SaaS) without undermining its substantial business in traditional packaged, perpetual-license applications. The other is to move from horizontal applications into vertical industries, starting with energy, engineering, and life sciences. Supplier Exchange appears well aimed because contract and project management in energy and engineering is a large and underserved market, and one that is rife with waste, inefficiency, security vulnerabilities, and compliance risks. Key messages Contract and project management is a significant challenge in the energy and engineering industries. Supplier Exchange will address key challenges by providing a secure SaaS environment where all relevant parties can store and access the myriad documents involved. In addition to storage and access, Supplier Exchange will allow participants to define workflows and collaboration methods that improve contract management by greatly reducing the time and cost to find and validate relevant information. Ovum. Unauthorized reproduction prohibited Page 1
2 Ovum view EMC's forthcoming Supplier Exchange service applies the vendor's expertise in secure document management to common problems in the management of complex projects and contracts in the energy and engineering industries. This is a competitive marketplace, and some vendors remain concerned about the security of multi-tenant SaaS. But few vendors have EMC's industry-specific focus, and none match its combination of scale, expertise (including expertise in security), and market position in document management. EMC believes it has built in the appropriate level of security, particularly in light of the risks inherent in ad hoc methods of information exchange such as . Contract and project management is a natural area for shared cloud deployment because it typically involves so many separate parties that need to exchange documents. We expect that Supplier Exchange will be well received. RECOMMENDATIONS FOR ENTERPRISES Why put EMC Supplier Exchange on your radar? Enterprises in the energy and engineering, procurement, and construction (EPC) industries face significant challenges in managing projects such as building power plants or oil and gas drilling rigs. Such projects typically take several years to complete. They can involve dozens of partners and suppliers and millions of documents, including contracts, design and engineering drawings, diagrams, procedure manuals, s, change orders, and certifications. Poor information management practices inflate costs, delay progress, increase compliance and safety risks, and undermine the performance of the finished product. Engineers, managers, and people in various other roles spend inordinate amounts of time simply locating and validating information rather than executing on it. EMC's forthcoming Supplier Exchange service extends the vendor's flagship Documentum offering to address such problems head-on. The service combines EMC's market-leading expertise in document management with a new multi-tenant SaaS platform, on which the vendor is staking a significant share of its future success. Energy and engineering companies that manage large, complex projects and contracts should assess their current capabilities in controlling costs, schedules, and risks. If they find significant levels of waste and inefficiency, they should evaluate Supplier Exchange on both its technical merits and EMC's track record as a trusted provider of secure, enterprise-grade software. Ovum. Unauthorized reproduction prohibited Page 2
3 HIGHLIGHTS Background Founded in 1979, EMC has grown through organic development and acquisition to become the leading provider of enterprise data and document management applications. Today, like many vendors of traditional enterprise software, EMC aims to accelerate growth by making two key strategic shifts. One is to change its focus from mature, horizontal enterprise software markets to fast-growing vertical industries, beginning with energy, engineering, and life sciences. The other is to expand its offerings to include what EMC calls the "third platform" applications and services that take advantage of cloud, mobile, social, big data, and analytics technologies, and can be deployed more quickly, at lower cost, than earlier ones. Broadening its product line will expand EMC's addressable market to include midsize companies that have so far found its products expensive and complex to deploy. The trick will be to do this without undermining the "second platform" applications (mainly client-server) that will continue to provide the bulk of its revenues. EMC began the shift toward the third platform in 2013, when it offered its Capital Projects management application as an on-demand managed service. It runs in a private, single-tenant cloud; customers purchase traditional software licenses and also pay a subscription fee. The vendor will take another step at the end of July 2014 when it releases a new version, called Capital Projects Express. Aimed at the mid-market, the Express offering will have nearly all the functionality of the on-premise offering but will run in the private, single-tenant cloud. EMC says it has worked to make the new version easy to implement and configure, and it will price it aggressively, on a subscription-only basis. Supplier Exchange will be EMC's first true SaaS offering The energy and engineering industries are characterized by large, multiyear capital projects that can involve scores of partners and suppliers around the globe and millions of documents. Such projects are managed through contracts that specify roles and responsibilities, schedules, materials, permissions, inspections, and so on. Over its lifetime, a single contract can spawn millions of documents such as the contract itself, work orders, change orders, certifications, maps, drawings, s, and letters. These documents are often poorly managed. They might be safely stored behind an enterprise firewall inaccessible to all who need them. Common workarounds include granting non-employees access to the corporate VPN, posting documents on open websites, and sending them by all inherently risky practices. One result is that vast amounts of time are spent simply locating and validating information up to 40% of engineering time in the capital facilities construction industry, according to a study by the National Institute of Standards and Technology. Inefficiency is just one expensive consequence of poor document management; others include mistakes, delays, cost overruns, and greater health, safety, and compliance risks. Supplier Exchange, which will be EMC's first true, multi-tenant public cloud offering, addresses such issues by providing a secure online repository where documents can be stored and accessed as Ovum. Unauthorized reproduction prohibited Page 3
4 needed. The service includes authentication and role-based access authorization, and allows the customer to define workflows and collaboration methods both internally and across all participants. (Typically the customer is the primary contract holder and cloud tenant, who pays the subscription fee. Partners and suppliers do not have to buy licenses or pay subscription fees.) Collaboration capabilities include notifications and alerts and document tracking through multiple versions and project phases. EMC has built connectors between Supplier Exchange and its Capital Projects offering and plans to do the same with its Asset Operations product. The vendor will build more connectors if warranted by demand from customers, who also may create their own. In its first iteration, Supplier Exchange handles closed contracts, or those whose terms and provisions cannot be changed without mutual consent of the parties. EMC plans to add open-contract capabilities, and while it has not specified a timetable, the SaaS platform enables frequent upgrades and rapid rollouts. EMC also plans to add support for smartphones; the initial version is designed for tablets (as well as PCs). EMC will also bundle Supplier Exchange with Capital Projects Express for a single fee. Over time it plans to recreate its full Capital Projects product on its new SaaS platform, though it will continue to offer Capital Projects on a private cloud basis for customers who prefer that model. EMC will have no shortage of competitors for Supplier Exchange, including IBM, SAP, Oracle, and many smaller vendors. But it is unique in its combination of resources, focus, new SaaS platform, and exceptional foundation in document management. DATA SHEET Key facts Table 1: Data sheet: EMC Supplier Exchange Product name: EMC Supplier Exchange Product classification: Enterprise SaaS Version number: 1.0 Release date: Planned for Q Industries covered: Oil & gas, utilities, EPC, natural resources, transportation Geographies covered: All Relevant company sizes: All, though EMC will primarily target large and midsize companies Licensing options: Subscription, based on number of documents under management URL: Route(s) to market Direct and partners Company headquarters: Hopkinton, Massachusetts, US Number of employees ~60,000 Source: Ovum Ovum. Unauthorized reproduction prohibited Page 4
5 APPENDIX "On the Radar" "On the Radar" is part of Ovum's series of research notes that highlights up-and-coming vendors that bring innovative ideas, products, or business models to their markets. Although "On the Radar" vendors are not always ready for prime time, they bear watching for their impact on markets and could be suitable for certain enterprise and public sector IT organizations. Author Disclaimer Warren Wilson, Lead Analyst, Energy/Oil & Gas Technology All Rights Reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior permission of the publisher, Ovum (an Informa business). The facts of this report are believed to be correct at the time of publication but cannot be guaranteed. Please note that the findings, conclusions, and recommendations that Ovum delivers will be based on information gathered in good faith from both primary and secondary sources, whose accuracy we are not always in a position to guarantee. As such Ovum can accept no liability whatever for actions taken based on any information that may subsequently prove to be incorrect. Ovum. Unauthorized reproduction prohibited Page 5
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