Firm targets mid-market buying 

For many medium-size and smaller companies, purchasing anything from toner cartridges to ergonomic desks is fraught with paper order forms, memos, fat catalogs and long wait times. Now, a Foster City software startup is hoping to streamline that process, jumping into the newly competitive midmarket sector.

Coupa Software announced the release of its free open-source "eProcurement" product this week, to be followed by a for-pay enterprise version next month.

With a computer interface similar to that used for consumer purchasing sites such as Amazon.com (AMZN), executives are touting an ease of use they believe will make purchasing managers and line employees alike work within the system, rather than ignoring cumbersome purchasing procedures.

Germany’s SAP AG (SAP), Redwood City’s Oracle (ORCL) and Sunnyvale’s Ariba Inc. (ARBA) all already make procurement software, Coupa CEO and co-founder Dave Stephens said, but he believes it to be expensive, complicated, and targeted at large firms.

"There’s not a lot out there for the mid-sized enterprise," Stephens said. "It’s the first solution that’s actually easier to use than to avoid. There are some Amazon ideas in there … for example, the employee [product] reviews, which you won’t find in another purchasing system."

The decision to target mid-size firms with roughly 500 employees is on the money, according to Paul Teague, editor in chief of the trade publication Purchasing Magazine. But, he warned, Coupa won’t be alone.

"They’re absolutely right, that midmarket and smaller companies haven’t been able to take advantage of some of the procurement software developments in the past few years," Teague said. But, he added, "There’s a lot of competition. Virtually every major software company is targeting the midmarket arena right now. They’re all on the case." The successful software firms will have an affordable, easy-to-use product, he said.

Menlo Park firm BlueRun Ventures provided Coupa’s first round of financing lastweek, partner Jonathan Ebinger said. He based part of his decision to invest on the track record of Stephens and his co-founder, Noah Eisner. Stephens spent about 10 years building Oracle’s procurement software, according to Coupa’s Web site, while Eisner worked as senior director of product management for Oracle’s procurement applications.

"At the core, with procurement, you want savings, you want control, and you want ease of use," Ebinger said.

The software uses an online system that lets users drag and drop desired items uploaded from existing catalogs into a checkout area, or fill in information when a new vendor is involved. The employee then sends the request electronically to the purchasing manager, who can approve or change it, print purchase orders and perform other tasks. More information is available at www.coupa.com.

kwilliamson@examiner.com

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