When the light goes on: How cloudBuy sees the world differently by Jon Hansen

Posted on April 29, 2014


Similar to our other New Wave 2014 organizations, there were a number of reasons why we selected cloudBuy as a company to watch this year.

From their relationship with Visa through which they are able to address the challenges that smaller suppliers face in terms of over 90 receivables that no longer support their operating line of credit, to the intuitive interface that provides a buyer experience similar to consumer oriented platforms, there appeared to be good reason for keeping a watchful eye upon the company

Despite that positive point of view, the one question that lingered was not one of potential, but instead tangible realization.

For those viewing the company’s website for the first time, and then reading about how cloudBuy plans to “become the biggest technology business in the world, beating Apple, Google and Microsoft,” one might be excused for wondering what it all means.  Specifically, is cloudBuy too diversified in the panoply of services it seems to provide to present a cohesive picture that the market can understand?

The reason I raise this question is that I have had the good fortune of being the President of a publicly traded company that was listed on a major exchange (TSE), as well as leading an application development team that eventually led to my selling my software company (and its web-based platform) for $12 million during the dot.com boom heyday.  Being on both sides of the client-vendor fence during that period certainly provides one with a unique lens of experience through which to view the ever changing procurement world.

Ironically, I was reminded of this background-based perspective when I was directed to a February 20th, 2014 Spend Matters UK post regarding cloudBuy.  After reading what was generally speaking a fair and even-handed piece, it dawned on me that the biggest challenge the company faces is that the industry journalists and analysts such as Gartner are viewing their offering from the buyer perspective as opposed to the supplier.

This isn’t just semantics about which we are talking.

If you look at cloudBuy from the buyer side of the equation, their multiple streams of diverse services is at once overwhelming and somewhat confusing.  Especially if you as Peter Smith pointed out, consider their revenue stream.  Something just does not appear to add up.

On the other hand as one considers services such as company registration, web site and catalog development and the incorporation of the embedded VISA payment system, it becomes clear that cloudBuy’s focus or view is from the supplier side.  Which goes a long way towards explaining the suggested low revenue red flag raised by Smith.

Let’s face it traditional revenue models were driven from the buyer side of the equation.  When you consider the alternative of having to develop and service a massive, highly splintered supplier-side market, the revenue flow is not necessarily going to be commensurate with the provider’s platform’s prowess and breadth – at least not at this stage of the game.

This is the reason why Peter Smith and the vast majority of industry journalists and analysts who have covered  cloudBuy refer to the company as an enigma in that it looks and acts big but does not appear to have the revenue stream to cast such a large shadow.  They are in short and understandably, seeing things primarily from the buyer side.

So what does all this mean?

Well quite frankly, if cloudBuy plays their cards right, the timing for them could not be better.

As highlighted in my February 6th, 2014 post regarding the Hackett Group’s study on supplier consolidation, rather than looking to rationalize supply bases, both public and private sector organizations are actively pursuing strategies surrounding an expansion of the number of suppliers with whom they deal.  The challenge is how do you engage a significantly larger number of suppliers while at the same time minimizing the associated risks.

This is where cloudBuy comes in.

Through their spectrum of services they are leveling the playing field across the board by empowering supplier capabilities to the benefit of the buyer.  And I am not just talking about a supplier repository service, but a true supplier development program that extends deeper and further into the supplier organization itself .

In talking with cloudBuy’s Ronald Duncan earlier today, he indicates that the company will be posting a series of articles in their In The Cloud blog over the next couple of weeks where they will highlight each stream of their supplier service offering.  They will then through this series tie these single streams of services into a single and cohesive platform picture that they hope will remove them from the shadows of being an enigma, to the bright light of industry revelation.

I will keep you posted.


cloudBuy sees procurement from a different perspective . . .

company registration
company registration


Posted in: Commentary