Market Overview: Contract Life-Cycle Management, 2014

For: Sourcing & Vendor Management Professionals Market Overview: Contract Life-Cycle Management, 2014 by Andrew Bartels, September 26, 2014 Key Takeaways CLM Software Helps Firms Create And Manage Contracts More Effectively Contracts are at the heart of all business-to-business (B2B) commerce, and contract life-cycle management software helps firms create, negotiate, track, manage, and obtain optimal value from their buy-side, sell-side, and other contracts. CLM Is On A Strong Growth Path, With SaaS Subscriptions Becoming Acceptable Traditionally, CLM was primarily a licensed, on-premises solution, due to general counsel aversion to putting firms contracts in the cloud. These deployments still remain common. But software-as-a-service (SaaS) is now growing in demand, especially for sell-side contracts, helping drive double-digit growth rates in the category. Choose The Right CLM Vendor By Matching Your Needs With Vendor Strengths We see 15 vendors offering leading CLM solutions, but each has a range of buy-side or sell-side focus, deployment models, linkages to other apps, and industry specialization. This report helps narrow your choice to the most relevant ones for your company and your needs. Forrester Research, Inc., 60 Acorn Park Drive, Cambridge, MA 02140 USA Tel: +1 617.613.6000 Fax: +1 617.613.5000 www.forrester.com

September 26, 2014 Market Overview: Contract Life-Cycle Management, 2014 CLM Becomes A Chameleon As It Links With Other Apps by Andrew Bartels with Chris Andrews, Nancy Wang, and Nathaniel Fleming Why Read This Report Every business or government has contracts with customers, suppliers, or other partners. Contract lifecycle management (CLM) software helps firms create, manage, and achieve maximum value from these contracts and is a key piece of the business technology agenda, especially for sell-side contracts. While sourcing and vendor management professionals increasingly use CLM tools to optimize their buy-side contracts, CLM tools make the most sense as enterprisewide solutions for handling all of a firm s contracts. Demand for CLM software is clearly growing, with revenues of CLM vendors projected to rise by 16% in 2014 and 12% in 2015. But the choice of the right CLM tool has gotten more complicated. Many vendors have strengthened their products by building linkages to related applications such as revenue management and configuration, pricing, and quoting on the sales side or to project management, risk management, and einvoicing on the buy side. Potential clients of CLM solutions need to look for vendors that understand their vertical industry, have focused on the types of contracts most important in an industry, and have built the connections with the related apps for the buying and/or selling activities of their industry. Table Of Contents 2 8 13 19 CLM Is Evolving To Meet New Client Demands CLM Connects With Other Apps CLM Will Continue To Experience Strong Growth, With A Shift To SaaS Specialist CLM Vendors Still Rule The Roost, Thanks To Linkages To Other Apps Profiles Of Prominent CLM Vendors Other Vendors With A Toe In (Or Out Of) The CLM Waters recommendations Choose CLM Vendors That Focus On Your Industry And Your Problems Notes & Resources Forrester interviewed a more than a dozen vendors, including Apttus, CLM Matrix, CMA Contiki, Exari, IBM Emptoris, Ivalua, OpenText, Prodagio Software, Revitas, SAP, SciQuest, Selectica, and Symfact. Related Research Documents Market Overview: 10% Growth In epurchasing Software Market Makes 2014 A Year For Buyers June 18, 2014 The Forrester Wave : Contract Life-Cycle Management, Q2 2011 June 29, 2011 20 Supplemental Material 2014, Forrester Research, Inc. All rights reserved. Unauthorized reproduction is strictly prohibited. Information is based on best available resources. Opinions reflect judgment at the time and are subject to change. Forrester, Technographics, Forrester Wave, RoleView, TechRadar, and Total Economic Impact are trademarks of Forrester Research, Inc. All other trademarks are the property of their respective companies. To purchase reprints of this document, please email clientsupport@forrester.com. For additional information, go to www.forrester.com.

Market Overview: Contract Life-Cycle Management, 2014 2 CLM Is Evolving To Meet New Client Demands Contract life-cycle management applications have been around for over two decades. In that period, these software products have continually evolved. Initially, they provided an electronic repository of all of a company s contracts, with standard templates for creating new contracts and basic reports and analysis of a firm s portfolio of contracts. They have since enabled employees to create exactly the contract they need using Microsoft Word, with clause- and term-level controls to make sure the contract that they create complies with corporate legal and business requirements. More recently, they have added advanced analytics and interfaces for leading mobile devices. Today, CLM products from vendors like 8over8, Apttus, Ariba, CLM Matrix, CMA Contiki, Exari, IBM Emptoris, Ivalua, OpenText, Oracle, Prodagio, Revitas, SAP, SciQuest, Selectica, and Symfact handle all the stages of a contract s life cycle. This includes integration of the CLM database into sellside or buy-side applications that use the contract details during B2B sales or services transactions (see Figure 1). There are six capabilities associated with end-to-end CLM: 1. Contract storing and repository. Any business today already has an existing portfolio of contracts that it has with buyers or suppliers, not to mention with its own employees or with users of its intellectual property (IP) or providers of others IP. In many cases, those contracts are a combination of paper contracts sitting in file cabinets and electronic versions in Word or PDF residing on someone s computer or a shared server. As a result, they are only available to someone who has access to those file cabinets or computers and exist in isolation from each other. Role of CLM: A CLM solution pulls all contracts into a single online repository, where they can be accessed by anyone with the right permissions to review them and where they can be searched and analyzed against each other for example, all contracts we have with vendor A, all contracts with indemnity clauses, or any contract expiring on June 30, 2015 (to pick an arbitrary date). 2. Contract drafting and negotiation. The contracting process generally starts with the generation of a draft contract, which is presented to the counterparty, with negotiations then determining what terms and conditions are in the final contract. This process customarily has involved lawyers in the legal department preparing a draft contract at the request of a business partner (e.g., head of sales or purchasing officer), using a set of templates and knowledge as to what terms and conditions are appropriate for a given contracting situation. That draft contract is then sent to the counterparty, who will mark it up with the changes that they would like to see, followed by revisions and counter-revisions until a final contract is ready for signature. Role of CLM: A CLM product streamlines this process. First, the legal department creates a database of standard terms and conditions and an explicit set of rules as to which terms or conditions should be used in which contracts. Then, a business user can create a draft contract using a wizard or guide that will pull in the appropriate terms and conditions, with controls

Market Overview: Contract Life-Cycle Management, 2014 3 on which language or terms cannot be changed, which can be altered by business users, and who in legal or the business would have to approve such alterations. Third, the product tracks all changes in the draft, identifying who made which modification at what date and time and allowing reversions back to an earlier version when both parties agree that was better than the modification path they had been going down. One clear benefit for legal departments is the ability to shrink the amount of time lawyers spend preparing and reviewing contracts by up to 80%. Many vendors have now introduced support for all or part of this process most commonly, the approval of changes to the standard contract to be performed on mobile devices. Support for electronic signatures from DocuSign, EchoSign, and other vendors is also becoming a key part of leading offerings. 3. Contract importing. In some contracting situations, one party may have to use the counterparty s contract (either because that party is bigger and more powerful or because of customary practice in an industry). In any case, almost all firms start with an existing portfolio of contracts that exist in paper, PDF, or Word document formats. Whether using its own or a counterparty s contract, the firm will have to import the contract into its contract repository, where it can be broken down into its constituent parts, with each term or condition tagged as to its type and role, such as the items to be bought or sold, the price to be paid, the payment terms, or the service-level agreement. Role of CLM: Most CLM vendors have special tools for importing third-party contracts typically some combination of automation tools for importing and tagging of text from scanned images or PDFs and arrangements with third parties who key in text from paper contracts. 4. Contract compliance and administration. As much as we might wish for it, contracts don t enforce themselves. Instead, contracts have to be managed and enforced. This can be and often is done by people who review transactions manually against contracts to look for signs of noncompliance. Still, this can be challenging, especially for complex, long-term contracts that are subject to changes and disputes. Role of CLM: While this manual process is still appropriate for overall vendor or customer relationships, CLM products can automate contract enforcement through linkages of contract terms to the transactional order management systems (on the sell side) or purchasing systems (on the buy side). That way, when an employee initiates a requisition in an eprocurement system, that product can check to see if the item being requisitioned is governed by an existing contract (with discounts) with a supplier, make sure the purchase order goes to that supplier, verify that price quoted by the supplier is in line with the contract price, and make sure that the shipping or delivery process, the payment due date, and service level agree with contract terms. Similarly, an order management system can check to see if an incoming purchase order comes from a customer under contract and set the price, the delivery, and service level to comply with the contract. Payments due or owed under IP licenses can be automatically made or received. Discounts or rebates owed to customers or resellers can similarly be automatically calculated

Market Overview: Contract Life-Cycle Management, 2014 4 and made. And compliance with regulations that touch on contractual relations can also be maintained. Some vendors, such as CMA Contiki, have a strong focus on management of changes and disputes throughout the life cycle of long-term contractual relationships. 5. Contract optimization. Contracts do not exist in isolation, nor is any single contract perfect. Firms want to make sure that contracts are consistent with each other and that the improvements and enhancements in contracts are shared. Role of CLM: CLM products make this feasible, with reporting and analysis tools that allow easy comparisons between contracts (for example, with the same vendor or for the same commodity). They can also identify contracts that have experienced frequent modifications since inception or those where the counterparty has failed to live up to contract obligations. 6. Contract renewal or replacement. Most contracts have an end date when the parties decide to let the contract lapse, renew it, or renegotiate it. Role of CLM: One of the benefits of CLM products is that they keep track of these end dates, with alerts that can be set weeks or months in advance. This helps companies renew the contracts that they want to keep, end the contracts that no longer are useful, and start the process of renegotiation early enough before the end date to allow time to reach agreement on new terms for these contracts. Figure 1 Contract Life-Cycle Management Software Supports All Stages Of A Contract s Life Cycle Contract storing and repository 6 1 Contract renewal 5 Contract optimization Contract drafting and negotiation 2 4 Contract importing 3 Contract compliance and administration 116775 Source: Forrester Research, Inc. Unauthorized reproduction or distribution prohibited.

Market Overview: Contract Life-Cycle Management, 2014 5 CLM Connects With Other Apps In today s business world, every firm operates in a complex web of business relationships that extend beyond the traditional dealings of buying parts and materials from suppliers and selling the resulting manufactured or assembled products to customers. Instead, most large and many small firms rely on a wide range of service providers for advertising services, marketing services, consulting services, outsourced services, travel or transportation services, or contingent staff services. In media or technology, firms use branded or copyrighted IP created by other firms. In construction, oil and gas, aerospace, and transportation, several different companies work together on development or delivery projects. In pharmaceuticals, medical equipment, high-tech, and other industries, sales occur through complex channels, with incentives in the form of discounts or rebates to encourage channel partners to sell one company s products instead of another s. In all these cases, contracts are the endpoints of sales and purchasing processes that set up these business relationships. And in all these case, contracts are the instruments that define how these relationships will be conducted, how money will flow, who will benefit (and to what degree) when things work well, and who will take the blame (and resulting costs) when they don t. Not surprisingly, the interconnection of these buying, selling, and partnering processes through contracts is also leading CLM software to become integrated with other software products that support these processes (see Figure 2). As a result, firms that are looking for CLM solutions also need to review the role that contracts play in their own versions of these buying, selling, and partnering processes. That review will help them find CLM products that are directly linked to the business processes that matter most to them. Buy-side CLM is linking to five different related applications: Buy-side CLM flows out of esourcing products and into eprocurement and einvoicing. esourcing tools help firms choose the suppliers with which they will do business and establish the price terms, so it s convenient if those terms can automatically flow into the draft contract. Or alternatively, the key parameters in an expiring contract can flow into a new request for proposal in the esourcing product. Vendors like Ariba, CLM Matrix, IBM Emptoris, Ivalua, Oracle, SAP, SciQuest, and (since its acquisition of Iasta) Selectica provide this integration of their CLM and esourcing products. Similarly, once a contract is in place, linkage to the eprocurement system can help drive employee and supplier compliance with the contract. Ivalua, Oracle, SAP (including Ariba), and SciQuest offer that kind of integration. Buy-side CLM ties to project management in project-based industries. In an industry like oil and gas, the development of a new oil field is a complex process that involves oil majors, oil field service companies, transportation companies, and specialist providers. The overall process is managed through a master project plan, with the roles of each participant defined by contracts.

Market Overview: Contract Life-Cycle Management, 2014 6 Vendors like 8over8, CLM Matrix, and CMA Contiki offer CLM solutions that tie into these capital project management activities. Ariba Contract Management and SAP CLM are also used in the oil and gas industry with customized linkages to the SAP modules for master project management. CLM links to risk management and compliance in regulated industries. In regulated industries like financial services, insurance, and pharmaceuticals, contract compliance on both the buy-side and the sell-side is tightly linked with broader regulatory compliance. Taking advantage of its many clients in financial services and pharmaceuticals in its home country of Switzerland and their affiliates and competitors in the UK and the US, CLM vendor Symfact has created an offering that links CLM with risk management compliance in areas of outsourcing management, legal entity management, internal policies compliance, and overall governance, risk, and compliance (GRC) management. Buy-side CLM links to invoice management for IP rights management. Prodagio has taken a different tack from other vendors in this space, offering both CLM and an invoice management solution. It turns out this integrated combination meets the needs of media and entertainment companies, which face challenges in tracking and managing payments and receipts of royalties for brand or content usage. Sell-side CLM is linking to a different set of four related applications: Sell-side CLM flows out of sales force automation (SFA) and into order management. On the sales side, sales leads that originate in SFA products like salesforce.com and Microsoft Dynamics CRM then turn into sales proposals and ultimately into sales contracts. Apttus, CLM Matrix, IBM Emptoris, Oracle, Revitas, SAP, SciQuest, and Selectica are examples of vendors that have built links from their own or partner SFA tools for the creation of a draft contract from a sales lead. Apttus stands out with its proposal management offering using the same architecture as its CLM product and for its very tight linkage with salesforce.com (Apttus is built on Force.com, and salesforce.com uses it for its own contracts). Once a contract is in place, integration with an order management solution can help assure that orders are executed in compliance with the sales contract. Many vendors offer this through integration with other order management solutions, but Oracle and SAP can offer direct integration to their own products. Sell-side CLM integrates with configuration, pricing, and quoting (CPQ). CPQ products in the distant past were rules-based engines that defined how products could be configured, how they should be priced based on the chosen configuration, and what prices should then be quoted to customers. CPQ products lost traction in the market as more and more business relationships were determined on a custom contract basis between business buyers and sellers and the resulting contract. However, more and more vendors are shifting from selling products to selling products-as-a-service. 1 Thus, CPQ has re-emerged as a growing application category that is linked with CLM in order to handle usage-based pricing under the contract. Vendors

Market Overview: Contract Life-Cycle Management, 2014 7 like Apttus and IBM with many high-tech clients have taken the lead in this kind of bundling, with other vendors like Model N and potentially Oracle (which acquired the CPQ vendor BigMachines in 2013) starting to offer it as well. Ironically, long-time CPQ leader Selectica abandoned such an integrated offering before it acquired Iasta this year and pivoted to focus on enterprise wide CLM, with increased attention to buy-side CLM. Sell-side CLM is tied into revenue management. Industries like pharmaceuticals and medical equipment have long had complex sales channel management challenges, involving rebates, discounts, and other incentives owed to channel partners and end customers. As a result, these industries have been early adopters of revenue management solutions that include contract management. Revitas was one of the first vendors with these kinds of integrated solutions, but over the years Model N and more recently Apttus have introduced similar products. Figure 2 Different Vendors Are Pursuing Different Points Of Linkage Of CLM With Apps Revenue mgmt. Apttus, Revitas CLM Matrix, Ivalua, Oracle, Prodagio, SAP einvoicing SFA Apttus, Ariba, CLM Matrix, IBM Emptoris, Oracle, Revitas, SAP, SciQuest, Selectica, Symfact 8over8, Apttus, CMA Contiki, IBM Emptoris, Ivalua, Oracle, SAP, SciQuest, Selectica esourcing Sell-side CLM Buy-side CLM CLM Matrix, Ivalua, Oracle, SAP, SciQuest eprocurement Order mgmt. CLM Matrix, CMA Contiki, Exari, IBM Emptoris, Oracle, Revitas, SAP, SciQuest, Selectica, Symfact 8over8, CMA Contiki Project mgmt. Revitas, Symfact Compliance mgmt. CPQ Apttus, Oracle, SAP Exari Legal matter mgmt. Note: Vendors cited here are prominent examples. The associated Excel spreadsheet has a more complete list of vendors with their links to related apps. 116775 Source: Forrester Research, Inc. Unauthorized reproduction or distribution prohibited.

Market Overview: Contract Life-Cycle Management, 2014 8 CLM Will Continue To Experience Strong Growth, With A Shift To Saas Overall, the market for both sell-side and buy-side CLM continues to experience strong growth. Our estimates for the combined revenues of all the vendors listed above (with allowances for other vendors that we are not aware of) show a CLM market of $678 million in 2014, with projected growth of 16%. We expect that strong growth will continue at a bit slower rate of 12% in 2015, reaching $761 million. The key characteristics of the market are: Licensed software still dominates. Many general counsels have long been skeptical about the idea of putting their firms contracts in the cloud, while chief procurement officers with licensed, on-premises (or hosted) SAP or Oracle eprocurement products have preferred to have their CLM products on premises (or hosted) as well for easier integration. Data privacy laws in Europe and Canada continue to be another reason firms prefer licensed software. As a result, license revenues will be $188 million in 2014, and the combination of license and maintenance revenues will total $344 million over half of all CLM vendor revenues. And growth in license revenues has been strong, at 12% in both 2013 and 2014 (see Figure 3-1). But SaaS is clearly making inroads and will reach one-third of CLM revenues in 2014. As chief sales officers have gotten comfortable with having all their sales contacts in the cloud with vendors like salesforce.com or Microsoft Dynamics, they have lobbied their general counsels to have sales contracts in the cloud as well. This dynamic for sales contracts is now spreading to buy-side contracts. As a result, we project that SaaS subscription revenues will rise by 40% this year, after a 28% rise in 2013. The Americas region represents over half of CLM market. While client interest in CLM is spreading in Europe, the Middle East, and Africa and starting in the Asia Pacific region, the US market continues to set the pace, growing at the same rate or faster than the global CLM market (see Figure 3-2). Sell-side CLM is growing faster than buy-side CLM. This is a bit of an artificial distinction, because most firms ultimately want to use the same CLM product for both buy-side and sell-side contracts. However, some vendors primarily focus on one type of CLM, and others provide guidance on how many clients are using their product for buy-side contracts, sell-side contracts, or both. Based on these indicators, firms are more likely to deploy CLM for buy-side contracts either initially or in general (for example, in industries like consumer retail, education, government, and healthcare that do not use customized sales contracts) than for sell-side contracts. Still, sell-side CLM is catching up, with consistent growth since 2012 (see Figure 3-3).

Market Overview: Contract Life-Cycle Management, 2014 9 Figure 3 The CLM Software Shift To SaaS Accelerates 3-1 SaaS subscription revenues will exceed one-third of total CLM revenues in 2014 2010 to 2015 CAGR 10% License 12% Maintenance 28% Subscriptions 11% Services 15% Total CLM market Total CLM software revenues by type of revenue (US$ millions) $386 $125 $98 $62 $441 $142 $112 $73 $101 $113 $507 $151 $122 $100 $586 $168 $143 $128 $678 $188 $156 $180 $135 $147 $154 $761 $203 $172 $216 $170 % change from prior year 2010 2011 2012 2013 License Maintenance Subscriptions Services Total CLM market 14% 14% 18% 12% 6% 9% 36% 19% 12% 17% 28% 9% 14% 15% 16% 16% 2014* 2015* 12% 10% 40% 4% 8% 10% 20% 11% 12% *Forrester forecast 116775 Source: Forrester Research, Inc. Unauthorized reproduction or distribution prohibited.

Market Overview: Contract Life-Cycle Management, 2014 10 Figure 3 The CLM Software Shift To SaaS Accelerates (Cont.) 3-2 The Americas region expands its lead in CLM adoption Total CLM software revenues by geography (US$ millions) $678 $761 $405 $586 $353 $507 $305 2010 to 2015 CAGR 14% Americas 16% Europe, the Middle East, and Africa 14% Asia Pacific 15% Total CLM market $386 $209 $126 $441 $232 $146 $275 $160 $203 $237 $261 % change from prior year 2010 2011 2012 2013 Americas Europe, the Middle East, and Africa $51 $63 $73 $79 $88 $96 11% 15% 18% 10% 11% 27% 2014* 16% 17% 2015* 15% 10% *Forrester forecast 116775 Asia Pacific 24% 15% 8% 12% 9% Total CLM market 14% 15% 16% 16% 12% Source: Forrester Research, Inc. Unauthorized reproduction or distribution prohibited.

Market Overview: Contract Life-Cycle Management, 2014 11 Figure 3 The CLM Software Shift To SaaS Accelerates (Cont.) 3-3 Sell-side CLM grows faster than buy-side CLM Total CLM software revenues by product focus (US$ millions) $761 $678 $481 $586 $434 $507 $379 14% 16% 2010 to 2015 CAGR Buy-side CLM Sell-side CLM $386 $250 $441 $296 $336 15% Total CLM market $136 $145 $171 $208 $245 $281 % change from prior year 2010 2011 2012 2013 Buy-side CLM Sell-side CLM Total CLM market 19% 7% 14% 14% 18% 15% 13% 21% 16% 2014* 14% 18% 16% 2015* 11% 15% 12% *Forrester forecast 116775 Source: Forrester Research, Inc. Unauthorized reproduction or distribution prohibited. Specialist CLM Vendors Still Rule The Roost, Thanks To Linkages To Other Apps We have classified the CLM vendors into three categories, based on their ownership (see Figure 4): 1. CLM specialists primarily focus on CLM and directly related apps. 8over8, Apttus, CLM Matrix, CMI Contiki, Exari, OpenText, Prodagio, Revitas, Selectica, and Symfact are the leading examples of these vendors. Several of these vendors have been leaders in building linkages from CLM to other apps like CPQ, revenue management, project management, GRC, and invoice automation. As a result, they will have over 40% of the CLM market (despite acquisitions that pull vendors into the other two categories). Assuming no acquisitions, they will grow faster than the overall market in 2014 and 2015. 2. Buy-side or epurchasing vendors include buy-side CLM in their suites. Ariba until its acquisition by SAP, IBM Emptoris, Ivalua, SciQuest (thanks to its acquisition of Upside Software in 2012), and Selectica (due to its acquisition of Iasta) are the leading examples of these vendors. SAP s acquisition of Ariba in late 2012 shrank this category in 2013 to an 11% share, and growth will remain sluggish.

Market Overview: Contract Life-Cycle Management, 2014 12 3. ERP vendors like Oracle and SAP offer CLM as an app in their broad portfolio. SAP s acquisition of Ariba and its own organic growth on top of Oracle s growth pushed the enterprise resource planning (ERP) category to a 46% share of the CLM market in 2013. However, these vendors will barely hold their share of the market in the face of the revival of the specialist CLM vendors. Figure 4 Specialist CLM Vendors Expand Their Share By Linking CLM To Related Apps 4-1 CLM specialists will expand their market share to 45% by 2015 Total CLM software revenues by type of CLM vendor (percentage of total CLM vendor revenues) Specialists Buy-side vendors ERP vendors 53% 50% 48% 42% 44% 45% 11% 11% 25% 24% 25% 10% 46% 46% 45% 27% 28% 22% 2010 2011 2012 2013 2014* 2015* 4-2 10% -5% 30% *Forrester forecast 116775 CLM specialist vendor revenues of $328 million will be higher than ERP vendors CLM revenues in 2015 Total CLM software revenues by type of CLM vendor (US$ millions) $726 2010 to 2015 CAGR Specialists Buy-side vendors ERP vendors 13% Total CLM market % change from prior year $386 $203 $96 $86 2010 2011 2012 2013 Specialists 7% 7% 2% Buy-side vendors ERP vendors Total CLM market $441 $218 $106 $117 10% 14% $489 $232 $122 $135 15% 11% $557 $236 $64 $257-48% 14% $648 $282 $69 $297 2014* 2015* 19% 16% Source: Forrester Research, Inc. Unauthorized reproduction or distribution prohibited. 8% 16% $328 8% 35% 15% 91% 15% 9% $74 $324 12%

Market Overview: Contract Life-Cycle Management, 2014 13 Profiles Of Prominent CLM Vendors The following profiles of prominent vendors can help steer you toward those vendors that are most likely to offer a CLM solution that fits your needs, industry profile, and deployment preferences. Readers should note: This market overview is not designed to provide the in-depth feature-andfunction product comparisons of a Forrester Wave. This section describes (in alphabetical order) the capabilities of various CLM vendors. It is not a recommendation or a ranking. Prominent CLM vendors include (see Figure 5): 1. Apttus gains with SaaS CLM, branching into CPQ and epurchasing linkages. Apttus Contract Management Suite has emerged in the past couple of years as one of the fastest-growing CLM solutions, especially for sell-side contracts. Part of the reason for its success is its tight partnership with salesforce.com, mentioned earlier. Another reason has been its focus on the whole quoteto-cash process, which has led to the addition of modules for sales proposal management, CPQ, and revenue management, as well as direct integration into salesforce.com s Cloud Sales product. Apttus has added buy-side CLM capabilities that have attracted over 100 clients. Apttus is only a SaaS product, with no options for deployment as an on-premises CLM product. 2. CMA Contiki integrates CLM with project management for oil and gas. CMA Contiki began by serving Norwegian companies operating in the North Sea oil fields with a CLM solution designed for their needs, as well as other Nordic companies engaged in long-term, global contractual relationships. CMA Contiki has continued to add features appropriate for big infrastructure projects, such as a contract repository that contains not just contracts and attachments, but all related documents and communications, including emails and linkages to the master project plan. CMA Contiki also has telco, finance, healthcare, utilities, and government clients that appreciate its integration of contracts with project management systems used in their organizations and the ability to track all contractual commitments and changes through the full life cycle of those contracts. 3. CLM Matrix emphasizes its Microsoft SharePoint platform. Matrix Enterprise from CLM Matrix is an application based on Microsoft SharePoint 2010/2013 and provides native integration with the Microsoft Office Suite. It is a wizard-configurable product that combines workflow capabilities, clause- and template-based document creation, and a rules engine. CLM Matrix has extended its product offering into adjoining apps through plug-ins and also offers a configurable Web Service Wizard used to integrate into most customer relationship management (CRM), ERP, project management, or CPQ systems. CLM Matrix has over 125 clients worldwide in many industry verticals, including finance, healthcare, oil and gas, pharmaceuticals, high-tech, hospitality, and media and entertainment. 4. Exari stays focused on contract creation and management. Exari s Intelligent Contract Management product leverages strengths in contract creation and contract analysis to attract about 70 clients in financial services, insurance, professional services, technology, and media.

Market Overview: Contract Life-Cycle Management, 2014 14 It s popular with general counsels and legal departments because of its ability to handle complex contract creation, to import and capture legacy contract data, and to provide in-depth contract compliance analysis. The product s APIs and support for open standards help clients integrate their contract data with third-party or homegrown applications, including CRM, onboarding, workflow, and collateral management systems. 5. IBM Emptoris remains a high-function CLM vendor. IBM Emptoris offers Contract Management for sell-side and for buy-side, which has been highly rated in Forrester Waves in the past. For a period after the IBM acquisition in 2012, Emptoris focused internally on upgrading the product through incorporation of analytical, integration, database, and other tools from the IBM product portfolio. Still, the IBM Emptoris CLM product continued to enjoy success in the market, with IBM reporting that the product s revenues are growing faster than Forrester s projected overall growth for the CLM market. 6. Ivalua offers CLM in its spend management suite. This vendor has developed a spend management suite that includes a true CLM product and that has over 50 clients. Most of Ivalua s clients are based in France, but it has a sales and support organization in the US, and about 20% of its revenues now come from the US and Canada. 7. OpenText Contract Management treads water while it creates a new BPM-based product. OpenText offers a CLM product that Forrester included in past CLM Forrester Waves. Sales have been modest in recent years, despite ongoing product enhancements for the 80 or so clients that are using that product. However, OpenText is working on a new product that will be based on the Cordys BPM (business process management) platform and released in 2015. A strength of the CLM product has been its integration with OpenText s document management product for clients that want a common platform for creating and storing contracts and other documents. 8. Oracle supports a fistful of CLM products. By our count, Oracle offers at least seven different CLM products: Oracle E-Business Suite (EBS) Procurement Contracts; Oracle EBS Sales Contracts; Oracle EBS Service Contracts; Oracle EBS Project Contracts; Oracle Fusion Procurement Contracts; PeopleSoft Enterprise Supplier Contract Management; and PeopleSoft Contracts. With the exception of Oracle Fusion Procurement Contracts, these are licensed single-instance products, either for on-premises deployments or as hosted products on Oracle OnDemand. An attractive feature has been their tight integration with related Oracle products, such as Oracle EBS Procurement Contracts with Oracle EBS Sourcing or Oracle EBS Purchasing. However, the different products for each type of contract can make it a challenge for general counsels, whose attorneys will have to learn to work in one product for sales contracts and another for procurement contracts. This issue is not as bad as it could be since the procurement, sales, and service products share the same contract library and authoring platform.

Market Overview: Contract Life-Cycle Management, 2014 15 9. Prodagio Software ties CLM to einvoicing to help CFOs maximize contract obligations. While many vendors have linked CLM to eprocurement and/or esourcing, Prodagio is the only one that has made integration of CLM with einvoicing a primary selling point. Prodagio s CLM product has over 40 clients, and it also offers an accounts payable automation or einvoicing product, either of which can be purchased separately. Its CLM solutions comes with nine vertical industry options, including a recently released royalty and rights management product for the media and entertainment industry. Prodagio is also pitching its combined offering to chief financial officers (CFOs) as a way to track their firm s contractual obligations and how those materialize in the invoices it receives for payment. 10. Revitas re-emphasizes CLM in balance with its revenue management offering. Revitas (formerly known as imany) was one of the earlier companies providing revenue management solutions to pharmaceutical firms to manage their contractual discounts and rebates to channel partners, group purchasing organizations, and large end customers like hospital chains. Over the years, first as imany and since 2012 as Revitas, this vendor has oscillated between emphasizing revenue management or CLM. It has now stabilized with a balanced focus on both lines of business. Its Revitas Revenue Manager product (formerly CARS) is expanding from pharmaceuticals and medical equipment into commercial industries such as high-tech and industrial manufacturing. Its Revitas Contract Management product has been sold both in Revitas traditional industries and in new areas. And its Revitas Integrated Agreements component integrates contract management and revenue management functions, so that both systems synchronize and share the most up-to-date version of business terms. 11. SAP and Ariba post strong growth with combined development but distinct products. SAP s acquisition of Ariba in 2012 has resulted in two clearly differentiated CLM products: Ariba Contract Management for clients that want SaaS and SAP Contract Lifecycle Management for those that prefer single-instance licensed or hosted CLM. Product sales is integrated for both products; SAP has one development organization for both Ariba and SAP CLM with a lot of feature and function migration between the two products; and one product solution marketing organization stands behind both products. Because of Ariba s heritage as a buy-side solution vendor, the Ariba CLM product is stronger for buy-side contracts than for sell-side, but Ariba has done a lot of work to bolster its sell-side capabilities. SAP CLM has been strong for both types of contracts, with prebuilt integration to SAP s SRM, ERP, and CRM suites. SAP reported that bookings and revenues for both products doubled in 2013, with equal demand for the Ariba SaaS product and for the SAP CLM licensed product and with strong growth in emerging markets like Brazil, Russia, Africa, and Asia. 12. SciQuest rebuilds Upside s CLM product and links it with other epurchasing products. SciQuest entered the CLM market through its acquisition of Upside Software in 2012. The Upside CLM product was a licensed software product that had been highly customized by clients but was not scalable enough to support the SaaS deployments that SciQuest offers.

Market Overview: Contract Life-Cycle Management, 2014 16 As a result, SciQuest has had to do some major revisions of the product to make it a true multitenant product. SciQuest is continuing to support Upside s single-instance version and clients, but its focus for the future is its SaaS CLM product. SciQuest is primarily focused on buy-side solutions, but about half of its CLM clients are using it for sell-side contracts. 13. Selectica pivots from CLM plus CPQ to CLM plus supplier management. Selectica in the early 2000s was one of the key players in CPQ; then it moved into the CLM market in 2005 through its acquisition of Determine Software. It has since primarily emphasized CLM while continuing to sell its CPQ solution to large enterprise clients with high-end requirements. In 2014, Selectica purchased Iasta, a midtier esourcing vendor, in order to offer an integrated CLM and supplier management solution. It is too soon to tell how successful this acquisition will be, but the two products have separately been competitive in their respective markets. 14. Symfact links CLM with compliance and risk management, especially for financial services. Symfact s Contract Management Software solution can handle procurement contracts, sales contracts, intercompany contracts, outsourcing/shared services contracts, large complex agreements, and leasing agreements. Its platform includes both its CLM product and a GRC product, as well as specific modules for policy management, regulatory change management, outsourcing management, and legal entity management. Its clients historically were concentrated in financial services and pharmaceuticals in Europe, but it has branched out to North America (where it now has about two dozen clients) and into other industries like consumer goods, manufacturing, high-tech, and the public sector.

Market Overview: Contract Life-Cycle Management, 2014 17 Figure 5 Prominent CLM Vendors With Their Focus Areas And Deployment Options Prominent CLM vendors Products 8over8 Procon Contract Management Suite Apttus CLM Matrix CMA Contiki Exari IBM Emptoris Ivalua Contract Management Suite Matrix Enterprise Contiki Enterprise Contract Management Intelligent Contract Management Emptoris Contract Management Buy Side; Emptoris Contract Management Sell Side Ivalua Buyer Contract Management OpenText OpenText Contract Management Sellside CLM Buyside CLM Industry focus Oil and gas Many Many Oil and gas, utilities Financial services, insurance, legal and professional services, technology Many Many Many Deployment options on-premises or hosted SaaS only on-premises or hosted on-premises or hosted on-premises or hosted on-premises or hosted; SaaS on-premises or hosted; SaaS on-premises or hosted 116775 Some clients Majority of clients Source: Forrester Research, Inc. Unauthorized reproduction or distribution prohibited.

Market Overview: Contract Life-Cycle Management, 2014 18 Figure 5 Prominent CLM Vendors With Their Focus Areas And Deployment Options (Cont.) Prominent CLM vendors Products Oracle Oracle E-Business Suite (EBS) Procurement Contracts; EBS Sales Contracts; EBS Service Contracts; EBS Project Contracts; Oracle Fusion Procurement Contracts; PeopleSoft Enterprise Supplier Contract Management; PeopleSoft Contracts Prodagio Software Revitas SAP Prodagio Contract Lifecycle Management Revitas Contract Management Ariba Contract Management, SAP Contract Lifecycle Management SciQuest SciQuest Contract Director Selectica Symfact Selectica Contract Management Solutions Contract Management Software Sellside CLM Buyside CLM Industry focus Many Many Pharmaceuticals, medical equipment, high-tech Deployment options on-premises or hosted; SaaS on-premises or hosted; SaaS on-premises or hosted; SaaS Many on-premises or hosted; SaaS Higher ed, energy, SaaS only healthcare, govt. Many SaaS only Financial services, pharmaceuticals, consumer goods, manufacturing, and public sector on-premises or hosted 116775 Some clients Majority of clients Source: Forrester Research, Inc. Unauthorized reproduction or distribution prohibited. Other Vendors With A Toe In (Or Out Of) The CLM Waters The vendors that we have highlighted here are the ones that we consider to have competitive CLM products. We have not included vendors like Blue Ridge Networks, Cobblestone, or Novatus Contract Management, which offer low-end, document-based contract management products that lack the clause-level aggregation/disaggregation of contracts provided by the CLM vendors. Nor have we included epurchasing vendors like Coupa, IBX Capgemini, Pool4Tool, Proactis, Scanmarket, SynerTrade, and Verian that provide basic contract management (e.g., repository, document templates) in their eprocurement or source-to-contract suites. However, a handful of other vendors crop up in discussions about vendors that should be considered in CLM selections:

Market Overview: Contract Life-Cycle Management, 2014 19 1. BravoSolution embeds contract management in its sourcing suite. An Italian-headquartered sourcing and spend analysis vendor with operations in Asia, Europe (France, Germany, Spain, and the UK), Latin America, and the US, BravoSolution sells a CLM product primarily as an extension of its broader suite. BravoSolution is currently emphasizing its sourcing and business process optimization services more than its software, and in software it leads with sourcing or spend analysis rather than CLM. 2. GEP provides CLM in its Smart eprocurement Suite. Like BravoSolution, this US-based vendor includes a CLM product in its suite of products for sourcing management. Also like BravoSolution, GEP has been placing more emphasis on its procurement business process outsourcing services than on its software products and on sourcing and spend analysis more than CLM. 3. Icertis slips into the market with Microsoft as a lead client. An India-based vendor that had built transportation management, public transport management, and fleet management on the Microsoft Cloud platform, Icertis came out with a CLM product in 2013 and signed up Microsoft as a client. It is a new entrant in this market, and we do not yet have further information. 4. Model N includes contract management in its revenue management offering. Model N has been the main (and arguably more successful, based on its revenue growth) competitor to Revitas in the market for revenue management solutions for pharmaceutical, medical equipment, and high-tech companies. Its solution contains a contract repository, but Model N does not offer or sell a true standalone CLM solution. 5. Open Windows offers a CLM product for the Australian market. Unlike the other Australian CLM vendor Exari, Open Windows has remained focused on the Australian government and business market and has not moved beyond that. 6. Perfect Commerce provides a CLM product tied to its sourcing and procurement suite. PerfectContract is a competitive offering, but it has just a dozen clients (including State Street Bank and the Federal Reserve Bank System), and they are using it only for buy-side contracts. 7. Zycus revamps its CLM product linked to sourcing and spend analysis. US-based Zycus added CLM to its sourcing suite in 2008, but the product has sold modestly within that suite. In July 2014, Zycus announced an upgrade product, called icontract Authoring Solution. Recommendations Choose CLM Vendors That Focus On Your Industry And Your Problems While this market overview is not designed to provide Forrester clients with guidance on which CLM vendor they should choose for their contracting needs, it can help narrow the field to the vendors that are most relevant. Based on our analysis of the market, sourcing and vendor management professionals can use the following filters to identify the right vendors for consideration:

Market Overview: Contract Life-Cycle Management, 2014 20 Do you want a SaaS solution or a single-instance CLM product (whether hosted or onpremises)? Most CLM vendors support either deployment model. However, in our view, it is hard for any software vendor to offer both effectively. 2 So, if you want a SaaS CLM, look for vendors that primarily or exclusively offer SaaS; if you want a single-instance CLM solution you own, can customize, and can use to keep direct control of your contracts, choose a CLM vendor that primarily offers this deployment model. What are your primary ERP, CRM, eprocurement, and other systems that need contract data? While CLM systems can and initially often do operate in isolation from transaction systems, sooner or later most firms will want to be able to integrate their CLM solution to these systems to provide them with the contract details that they need. Choosing CLM vendors with easy, proven integrations and compatibility with these systems will pay off in the long run. Are your contract needs primarily buy-side, sell-side, or both? In some industries like government, healthcare, education, and retail, sell-side contracts are standard or nonexistent, so buy-side contract needs will dominate. Here, it can make sense to acquire a CLM product from the same vendor that provides your sourcing, spend analysis, and supplier risk and performance management solution. In other industries like pharmaceuticals or medical equipment, sell-side contracts present the most issues, so you want to look for a CLM solution that is strong in sell-side contracts. But most industries have both buy-side and sell-side contracts, and in those cases you will want a CLM product that is equally strong in these and other contract dimensions. What are the specific contract challenges in your industry? As we have noted in this report, several vendors have developed CLM solutions specifically tuned to the contract challenges in different industries. If your company operates in one of the industries where these specialized CLM solutions have been created, focus on the vendors that have created them. Supplemental Material Online Resource The underlying spreadsheet detailing the data and forecasts in Figures 2 through 5 is available online. Companies Interviewed For This Report 8over8 Apttus CLM Matrix CMA Contiki Exari IBM Emptoris Ivalua Nextance

Market Overview: Contract Life-Cycle Management, 2014 21 Open Windows OpenText Oracle Perfect Commerce Prodagio Software Revitas SAP SciQuest Selectica Symfact Endnotes 1 For example, Lexmark International is selling printers on a charge-per-page basis; Rolls-Royce Aerospace is selling jet engines on an hours-flown basis; and of course cloud vendors are selling computing resources or applications on a subscription basis. 2 We detailed the challenges that licensed software vendors face in offering SaaS solutions in a 2013 report. See the August 26, 2013, Be Wary Of Licensed Software Geeks Bearing SaaS report.

About Forrester A global research and advisory firm, Forrester inspires leaders, informs better decisions, and helps the world s top companies turn the complexity of change into business advantage. Our researchbased insight and objective advice enable IT professionals to lead more successfully within IT and extend their impact beyond the traditional IT organization. Tailored to your individual role, our resources allow you to focus on important business issues margin, speed, growth first, technology second. for more information To find out how Forrester Research can help you be successful every day, please contact the office nearest you, or visit us at www.forrester.com. For a complete list of worldwide locations, visit www.forrester.com/about. Client support For information on hard-copy or electronic reprints, please contact Client Support at +1 866.367.7378, +1 617.613.5730, or clientsupport@forrester.com. We offer quantity discounts and special pricing for academic and nonprofit institutions. Forrester Focuses On Sourcing & Vendor Management Professionals To help transform your organization for sustained business innovation, you re challenged with balancing business value, cost, and risk when sourcing and managing technology vendors. Forrester s subjectmatter expertise and deep understanding of your role will help you create forward-thinking strategies; weigh opportunity against risk; justify decisions; and optimize your individual, team, and corporate performance. «Stefan Valenti, client persona representing Sourcing & Vendor Management Professionals Forrester Research (Nasdaq: FORR) is a global research and advisory firm serving professionals in 13 key roles across three distinct client segments. Our clients face progressively complex business and technology decisions every day. To help them understand, strategize, and act upon opportunities brought by change, Forrester provides proprietary research, consumer and business data, custom consulting, events and online communities, and peer-to-peer executive programs. We guide leaders in business technology, marketing and strategy, and the technology industry through independent fact-based insight, ensuring their business success today and tomorrow. 116775