[sws_grey_box box_size="690"]SUMMARY - California-based spend management firm Coupa is shifting its global customer support operation to Dublin, Ireland as it looks to be perceived as an international player. [/sws_grey_box]
One thing the Irish government has done well is prove to be an attractive destination for US tech companies - and increasingly cloud companies in particular - to set up their European headquarters. Last week, for example, Derek highlighted Birst as being the latest to join the likes of Google and Amazon in the Emerald Isle.
But none of those firms has done what spend management firm Coupa has just done which is to route its entire global customer support operation through Dublin.
In addition, Kieran Brady of Coupa Dublin has been promoted to the role of Vice President of Global Technical Support and Technical Account Management for Coupa and will head Coupa’s support teams in Dublin as well as San Mateo, California and Reno, Nevada.
Coupa cites factors such as the ability to address requirements particular to the European Union, such as data privacy and protection regulations, as well as enabling the firm to reduce turnaround time for customer service requests by up to 50% in both EMEA and North America.
All told, it’s a significant stake in expansion in Europe and beyond for the San Mateo-based firm, but one that’s entirely sensible according to CEO Rob Bernshteyn when I caught up with him last week. He told me that EMEA was Coupa’s fastest-growing region during the first half of 2014 with sales up 200% year on year, but that there are reasons other than fiscal that have sparked the move to shift support to Dublin. He said:
If we look at last year’s worth, some 20% of our revenue was coming out of Europe. That’s one of the reasons we’re investing in Europe so much. We’re actually expanding our support center out of Dublin in Ireland in a way that’s not going to be like any other company. Our entire global support operation is going to go through Dublin.
The time zone is useful, but it’s more about making a very clear statement to our European customer base that we are operating as a truly global company. We are a global company and we want to have global support capabilities.
It’s also a useful reminder of the firm’s goal to be regarded as more of a global player that can pitch itself convincingly as an enterprise provider:
Four years ago, Coupa was seen as something that was great for mid-market companies. It took us time to prove that we could scale up. So we are today not just for the mid-market, we can support all sizes.
There has been this perception that we’re somehow not a global company even when we have massive global customers such as the Royal Bank of Canada.
Bernshteyn sees the spend management sector as being one ripe with fresh opportunities for a firm like Coupa, going so far as to claim:
We don’t have gatherers, only hunters.
Last year, our return revenue by dollars and by net new customers was coming from green field opportunities. We are not going out there to replace our own products, we are going out to replace legacy Oracle, SAP, Ariba On Premise, some Ariba On Demand.
Very recently we completed a global replacement deal where we replace Ariba for procurement and Concur for expenses.
Some deals take two months, some take two years. We don’t lose a lot of deals when we bid unless it’s with customers who have always been a Oracle shop or an SAP shop and just really don’t want to change.
Wagging the dog
But while there’s opportunity aplenty, there’s the small matter of competing against what are global CIO-recognisable brands. While the rise of firms like Salesforce.com and Workday to displace the status quo in their market segments demonstrates that the tail can always wag the dog, it’s a challenge that many firms fail to meet.
A veteran of SuccessFactors, itself bought out by SAP, Bernshteyn is aware that one of Coupa’s biggest issues is how to get on the radar of prospects in the first place:
Our challenge - and why marketing is so important to us - is that we know that we are not getting into all the opportunities that we can address. SAP acquired Ariba and those people they acquired have existing deep relationships with customers who may not realise that there are other options they can evaluate.
I’m not willing just to go and spend millions on brand marketing. Referenceabilty is important to us. Good content is important to us. Strong partnerships are important to us. We have build very strong relationships with the likes of KPMG. Our relationship with Accenture is being developed as is our relationship with IBM. We will foster those very carefully in a way that is going to be helpful to our customers.
When we do that, it becomes a matter of getting that extra exposure to opportunities. Yes, we are going to spend on marketing, but our message is that we want to ensure that every customer is getting to do everything possible to deliver quantifiable and measurable success.
What customers need from the likes of Coupa varies of course. Bernshteyn explains:
There are significant variations in customer requirements. One example is the customer who thinks that its spending is optmized as much as it can be on the revenue side, payroll, people etc, but there are whole areas of indirect spend that it doesn’t have control over. There’s that long tail of suppliers that it needs to get on top of.
Another type of customer is the one where they have been sold legacy reporting systems and want to use something more modern that isn’t expensive or causing a lot of friction. Sales people of course want something very intuitive.
It’s been said that the global recession was inadvertently a good thing for the cloud computing vendors as organizations drilled down on running costs. That being the case, it’s surely all the more so for a cloud firm specializing in spend management. What will be interesting as countries emerge from the economic downturn and prospects pick up is whether keeping an iron grip on spending is here to stay.
Bernshteyn is somewhat pessimistic that organisations will slip back into bad habits:
It’s already happening. People are beginning to stretch the rules. The average hotel stay per night costs have gone up around 30% over the last 3-6 months compared to where they were a year ago.
But that in turn provides another opportunity for spend management vendors, he concluded:
We can show our customers where this is happening. If you’re a professional and you don’t know whether you should negotiate with Staples for staplers or focus on the hotel costs per night, we can give you that insight.
Spend management is one of those eternal business market segments that there's always going to be a need for and it's one that has been due a shake-up for a long time. But competing with giants like Oracle and SAP is always a challenge, although there is an increasing number of cloud start-ups that have proved it is more than possible to get under the skin of the giants.
Coupa's decision to move support to Europe is an interesting one and indicates its intent to be perceived on a global stage rather than as a US firm that does well on the home turf, but takes longer to grow overseas.
Disclosure: at time of writing, Oracle, Salesforce.com, SAP and Workday are all premium partners of diginomica and Coupa is a partner.