(Based on numerous sources and industry analysts following the e-procurement space.) 10/15/01 (EXCLUSIVE REPORT WhatTheyThink.com) - One of the most visible and recognized of the e-procurement providers in the print industry is Noosh. The company launched in 1998 and until recently - described itself as an “Internet-based communication service for enterprise critical printing.” The company’s primary purpose was to serve printers and print buyers by automating print purchasing via web based collaboration. Last week, Noosh acquired digiGroups, a developer of web-based collaboration technology that allows businesses to interact with customers in a highly-customizable fashion. At the same time, Noosh “consolidated” their staff to focus more on general deployment of e-procurement with less emphasis on selling products directly to printers. Ned Gibbons, director of sales development and Jim Taylor, Product and Marketing Manager of Noosh Direct were released in the process. Gibbons and Taylor, among other duties were charged with building relationships with printers via Noosh Direct. Noosh Direct, released in June after many delays, was to be the printer’s sales management e-collaboration solution. The product was developed as a stand-alone offering sold as a subscription package to printers. Noosh Direct was also “a good faith product” for printers. This from a company that has been dogged by many printers for their strategy of calling on buyers. Some printers think Noosh should have sold all their solutions to printers only, thereby avoiding the certain conflict. Will Noosh continue to support Noosh Direct? Is their primary business web based print procurement solutions? Noosh’s transition story: a window into e-procurement of the future? Now and Then A simple way to understand Noosh ‘now versus then’ is their own description from their press releases. At the end of many company’s press releases, there is a brief statement describing their firm. Examine the ending of a Noosh release from 2000 and then read an ending from their most recent release. From 2000 Noosh, Inc. was founded in 1998 to create the industry’s only business-to-business Internet-based communication service for enterprise critical printing. Noosh.com dramatically improves the process of buying, selling and managing print. Leveraging the power of the Internet and popular browsers, Noosh.com strengthens buyer-printer relationships by providing a collaborative environment where corporate buyers, printers and creative agencies work together efficiently to manage complex corporate printing. By developing a community of partners, Noosh will set a new industry standard for the management of critical print. From October 2001 Noosh, Inc. offers superior cross-enterprise collaboration technology that rapidly cuts the real cost of doing business. Founded in 1998, the company is recognized as a market leader in collaborative process management and procurement of non-catalog items and currently processes over $100 million in transactions annually. Large corporate organizations and their suppliers use Noosh to manage and procure custom goods and services. Noosh customers include Aetna, Bank of America, General Electric, Wells Fargo Bank, and other leading Fortune 500 enterprises. An amazing transition. There has been a gradual change over time in their descriptions, but June 19th marked the first time that Noosh did not reference print at all. Make no mistake, print is Noosh’s big foot in the door, but the company is expanding to serve every area of non-catalogue purchases like temporary services, capital equipment, media, business insurance and, of course - print. Noosh Direct According to Noosh, Noosh Direct is designed to dramatically improve the quality and productivity of printing sales and customer service. Suppliers can automate the flow of information both within their company and with their customers. Noosh planned to sell the product to their previous print customers and also develop sales channels to promote the service. Listen to what Jim Taylor told us earlier this year. “The front end of the print process is the last area to be automated - and ironically, the sales staff is probably the most highly compensated department. So productivity improvements here can be very rewarding.” Taylor’s history is important to understand. Noosh acquired the rights to the Carpe’ Data software product, which Jim was the founder. Noosh Direct is based on his work with the product and his leaving the company has many questioning whether Noosh Direct will be supported. One printer customer we spoke with said Noosh told them on Thursday that “sales direct to the printer were no longer a focus.” Of Noosh Direct, another source said “full support was tough to justify for a company like Noosh and adoption was slow, not because of the product functionality but because printer’s are skeptical of Noosh.” As stated, Noosh Direct was a customized solution to help sales reps within print firms. Newly acquired, digiGroups’ primary product called ACE basically does the same thing except it has a more general build. According to digiGroups, “ACE is for Global 2000 manufacturers that supply products where a significant exchange of information needs to occur before and after the sale. ACE enables account teams to rapidly assemble and present customized information in the form of collaborative web sites.” On Friday, Brian Miller, Vice President of Product Marketing at Noosh brushed aside the above comments and said they would continue to deploy and support Noosh Direct. Miller says Noosh Direct helps printers better serve all their customers. When pressed, Miller admits that buyers are certainly their key focus, but he would not dismiss printers as a target customer going forward. “Printers are a very important part of our business. But, certainly our key target and success is when a buyer makes the decision to use Noosh.” Shifting Resources Noosh has had many requests from top customers to expand their services outside print collaboration. GE, for example, told Noosh that they spend much more in other areas besides print. It’s true that suppliers like Noosh will be forced to diversify their solutions. Examine these quotes: Linda Ludwig, Whirlpool's manager of creative and publishing services said, “Our deployment (of Noosh) is moving along rapidly and we see many opportunities to expand our usage of Noosh in other areas of the company.” Glen Nemeroff, Director of Print Management, CIGNA HealthCare said, "While we were able to implement Noosh in our Print Management group in less than 45 days, we are continuously introducing Noosh to others in the company who can benefit by it." Becky Lancaster, vice president and purchasing director at Wells Fargo said she is now looking to take her department's partnership with Noosh to the next level by enlisting their Web-based technology to manage other commodities such as capital equipment purchase that require a collaborative effort. You can see how a sales management software solution like Noosh Direct for printers can get less attention. Lessons From Noosh? The Future of e-Procurement The fact that Noosh has survived this long is a testament of their technology and executive management skills. However, the shift to a more general solution may cost more than expected. Noosh’s competitors are not just Printable, printCafe and other print only ASP’s. They are now in the mix with dozens of other well funded companies like IBM, Oracle and SAP. These companies are targeting the entire spending of Fortune 1000 companies. One industry watcher illustrates the competitive landscape for the “new” Noosh. “The purchase of consulting services by Fortune 1000 companies was a huge market in the late 90’s and is today. Companies developed web based systems to manage the acquisition of consulting services and even collaboration during the consulting project. Now, these companies are also being asked to expand their web based consulting solution to include print, media, temporary services and capital equipment - just like Noosh. Companies are looking for one source as the foundation for all web based purchasing and Noosh is headed in the right direction. However, Noosh may be better suited to be acquired for their print component than to get into a slug-fest with bigger players.” Of course, this opens Pandora’s box of questions: Does Noosh have enough money to play against general e-procurement companies like IBM and even other Noosh-size companies? Would printCafe and other print ASPs head in the same direction as Noosh if their print buying customers asked them for non-print procurement solutions? Do general ASPs which now includes Noosh care about workflow integration from the print suppliers? And finally, is there any incentive for the general ASPs to maintain good relations with supplier organizations? (In Noosh’s case, PIA, NAPL and even PrintTalk) One industry consultant emailed this possibility: “Printer A has 5 top customers. Printer A selects Printable to automate web based procurement for their clients. While their top clients like the Printable solution, over time, the following happens: Customer #1 selects Noosh Customer #2 selects printCafe Customer #3 selects Oracle Customer #4 selects IBM Customer #5 stays with Printer A’s solution Printer A is expected to still print for these clients. This example is extreme right now, but printers need to be aware of the decisions they make today in terms of compatibility tomorrow.” Printable and other solutions are indeed compatible with most any interface a company may select. But in the example above, Printer A may now have to compete with a whole new set of general print suppliers who have signed up with Noosh, Oracle etc. A Slow Moving Freight Train Jan Stoddard of Raine Consulting recently wrote an article entitled “The Squeeze Play” published in our eXpert Row. “The customer push will continue because the e-Procurement savings are real. Hackett Benchmarking & Research finds that top-performing companies have fewer vendors than average companies, improved supply chain integration, more effective application of online catalogs and electronic ordering, as well as better negotiated pricing due to leveraged buying. The bottom line - One-third reduction in transaction processing costs (as a percentage of spend) by companies conducting more than 20% of their purchasing on-line. For enterprises to remain viable, inefficiencies must be squeezed out of their supply and demand chains." Stoddard concludes, “Like it or not, the Internet and its’ impact on the print world is not going away. Instead, picture a 5 mile per hour Freight Train that is slowing, inching its way towards you. But, when it hits you, there won’t be any question…. it has arrived. Take time to occasionally glance down the track. Get informed, adjust your business plan, identify your own alliance strategy, and talk to your customers about inefficiencies." Back to Noosh GE’s print expenditures are near $1 billion annually. Noosh could spend the rest of their existence serving that one account and branching into other “non-catalog” areas within GE’s different divisions - They have already deployed their print platform in some 35 divisions. Last week, Noosh announced the opening of an office in Europe to serve GE with more new customers in the pipeline. Miller says they don’t need more cash to break even and they are very comfortable with their future. So if you are a large buyer, Noosh wants to show you their system. They’ll also want to show your CEO and CFO how they can help in other areas of procurement besides print. If you are a printer, Noosh may be calling you soon. Most likely they won’t be trying to sell Noosh Direct - They’ll inform you that one of your customers has selected Noosh to automate purchasing on their system. “When would be the best time to meet with you to discuss your continued relationship with your customer?” Don’t blame Noosh - one way or another, e-procurement is a slow moving Freight Train that will arrive.