On July 31, DocuSign announced that it was acquiring SpringCM for $220 million. I think a general “huh?” could be heard across the industry. What exactly does this mean? For the last few years I’ve been looking at the two markets, of ECM and CLM, and the confusion that exists between them.
About DocuSign and SpringCM
DocuSign has been the default electronic signature company as electronic signature technology emerged. DocuSign has pretty much partnered or integrated its technology with every major software vendor especially those in Enterprise Content Management (ECM), a.k.a. Content Services Platforms, and Contract Lifecycle Management (CLM). DocuSign has had very few competitors. Adobe Is the only other leader and HelloSign has been making some hard moves into the OEM space. This can be seen in DocuSign’s market capitalization of over $8.7 billion.
SpringCM, on the other hand, has been trying very hard. SpringCM was founded two years after DocuSign in 2003. SpringCM raised over $150m in venture funding. SpringCM has been standing on the edge of cloud ECM and CLM for some time. (At one point SpringCM was a Marketing Asset Management company.) But over the last few years it’s been in both ECM and CLM. Most ECM vendors did not see SpringCM as a major competitor, nor do most CLM vendors.
What is DocuSign doing?
When looking at the market and the shift to Content Services Platforms (CSP), it’s inevitable that DocuSign would look to expand its position in this market to provoke some new growth. The company had two choices. It could continue to provide technology to vendors to allow them to build solutions (what they have been doing) or become a solution provider of their own. They decided it was time to become a solution provider. Here are some of my concerns.
CLM is a Large Market
DocuSign will now be competing in the CLM market. There are over twenty vendors in the CLM space. SpringCM was never a major player in this space. The biggest CLM vendor is SAP Ariba and other major vendors include Coupa with a market cap of $3.5 billion and Apttus and Conga who have both received funding from Salesforce Ventures. Because of Salesforce Ventures investment in Apttus and Conga these two vendors have a strong relationship with Salesforce.
The Contract Lifecycle Management space is also a bit confusing with all the different “buzzwords”. In addition to CLM, this space is also called “Procure to Pay,” “Quote to Cash,” and even Enterprise Contract Management. Now DocuSign wants to call this a “System of Agreement”. Some of these vendors are partners of DocuSign.
ECM is a Changing Market
For those that haven’t been watching ECM closely, it is a space of transition. There has been a major shift in most of the market. Long time player, Documentum was acquired by its competitor OpenText and Alfresco was acquired by equity capital. These changes have much of the market in flux. The space now is being called Content Services Platforms (CSP). The idea is that ECM solutions are used to build other end solutions. But again, SpringCM was not a major player in ECM, or CSP. DocuSign has been a partner of every ECM vendor.
What I See Happening
I think that with DocuSign suddenly becoming a competitor in the ECM and CLM space, it’s inevitable that other ECM and CLM vendors may look to a new partner for electronic signatures that is not a competitor. This will probably be more significant in the CLM space as this is where they will be directly competing. Most CLM vendors have partnered with DocuSign.
The DocuSign sales team will also need to lean heavily on the SpringCM sales team. To date, DocuSign has been a supporting player. It worked with workflows of any type to provide review and signature capabilities, but now it will need to sell to end users based on a specific business process. They will now need to talk to the contract drafting process based on using preapproved clauses and how they can speed up the negotiation of contracts. They will also need to be able to talk to contract expiration versus evergreen contracts and monitoring performance to contract obligations, topics that may be very foreign.
Still I think that DocuSign is in a great position when it comes to CLM. With the financial resources that DocuSign can bring to the space, it is easily the number two after SAP Ariba. With Ariba’s focus on SAP, this easily places DocuSign as the largest vendor on top of Salesforce. Overall there a lot of potential positives here but it’s a bumpy road ahead.