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- May 12, 2016
- Donna Wilczek
Coupa today announced that its customers have connected and done business with more than two million unique suppliers through our Open Business NetworkTM.
Clearly, this is a major milestone for our company.
We set out to reinvent the business network for the age of the ultimate network – the Internet. We wanted to use technology to break down the barriers between buyers and suppliers and create an open network where anyone can transact for free, without even registering.
As a result of these efforts, Coupa now has one of the largest supplier networks in the world, encompassing customers and suppliers doing business in over 100 countries. We’re celebrating this because it validates our vision, our open interoperability business model and most importantly, the value the network is delivering to our customers.
That’s the difference of the Coupa Open Business NetworkTM; it actually gets business adoption and participation at levels never before seen in our industry. The measurable value our customers see in the form of decreased costs, increased compliance and productivity gains.
That’s why it’s important to us.
Part of an historic disruption
Here’s why it’s important to the market.
We assembled this network in seven years in partnership with our customers, signaling that the same kind of disruption caused by massive consumer-oriented networks is also happening in the business-to-business world.
What is this disruption? It’s the breaking down of historic barriers to communicating and transacting. Information can now be shared instantly and inexpensively on a global scale. Time zones and geographical boundaries have been reduced to minor obstacles. Global trade is within reach of even the smallest firms through marketplaces such as Alibaba, Amazon, Flipkart, and more.
Networks are making that happen. Everywhere, closed proprietary networks are being replaced by open networks that anyone can connect to, drastically reducing the role and power of gatekeepers and tilting the playing field towards players who can achieve so-called network effects. Simply put, network effects are the phenomenon whereby the network becomes exponentially more valuable the more people use it.
The Coupa Open Business NetworkTM supports the interoperability that is critical in today’s digital economy. In the same way one e-commerce website does not meet the needs of every consumer buyer, the same thing is true in business. There will never be one network that covers all of the 200+ million businesses in the world. Coupa’s model is to allow businesses to connect to any of their businesses---from a small business providing landscaping services or delivering lunches to the largest business suppliers in the world to large global marketplaces (like AmazonBusiness and Alibaba).
Free for family and friends only
Take wireless communication networks, for example. People of a certain age will remember the days when carrier networks weren’t interoperable. In the mid-90s, a Sprint customer could not call or text an AT&T customer. Technology soon solved that problem, but carriers still had a proprietary network mindset, charging customers extra for the privilege of calling or texting with people in another carrier’s network.
This limited the utility of the cell phone. You had to think about who was in-network or out of network, and you had to think about the cost of going outside the network. To combat this, carriers ran “free calling for family and friends” marketing campaigns as a way to try to get their subscribers to convince their connections to join the same network.
It seems short-sighted now, because obviously no one carrier could ever get everyone you’d ever possibly want to call on their network. Competition and advances in technology combined to disrupt that model and break down those walls. Carrier networks are now open (though you still can’t transfer your handset from one carrier to another) and callers no longer even have to think about the network at all when they make a call.
DocuSign is another good example of an open network. If your company has an account, you simply email your document to the person who needs to sign it, and they sign it and send it back to you. So is Evite. You can easily set up an account and email invitations to anyone. They can accept your invitation through Evite even if they don’t have an account.
The value and efficiency of DocuSign or Evite would be much, much less if you could only send documents or invitations to people who were registered on their networks, or if people had to pay a fee to sign your document or accept your invitation.
The network effect
These companies are successful because they provide these services without the friction. The open network helps maximize the value of the service, rather than constraining it.
This is what we’re doing at Coupa with the Open Business NetworkTM, and why reaching the milestone of over two million suppliers transacting through the network is important news. Disruption in our market has arrived.
Here’s why it’s not important at all
Because the only suppliers that matter are your suppliers, and the only thing that matters is that you can connect with them and do business together in whatever way is easiest for both of you. This includes the suppliers that you don’t even know about right now. The suppliers you will do business with tomorrow and the days after.
There are estimated to be over two hundred million businesses in the world. Two million is just a tiny fraction of them. It’s as short-sighted to think one network could ever contain everyone you’d ever possibly want to transact with as it is to think one cell carrier network would ever have everyone you’d ever want to communicate with. Interoperability with other networks and by providing a free, simple-to-use platform, we hope to continue driving adoption in the farthest-flung corners of the globe – and, by the same token, make it easy for you to assemble your supply partners on one cohesive network.
The size of the network isn’t important at all. The only thing that matters is how easy it is to connect to it. And that is the most important business value driver of all.