Interview Research 451 about contract management software

451 Research / Interview, Dr. Katy Ring

The team of Cloudtract were invited by renowned 451 Research institute to talk about their free contract management software and to travel to London for an interview with Dr. Katy Ring.

About 451 Research

451 Research analyzes the technologies, services and companies that disrupt and evolve information technology. 451 Research is a preminent information technology research and advisory company. Founded in 2000 and headquartered in New York, 451 Research is a division of the 451 Group. The company has over 100 analysts deployed worldwide, each providing critical and timely insight into the competitive dynamics of innovation in emerging technology segments.

About Dr. Katy Ring

With more than 25 years of experience in the IT industry, Dr. Katy Ring provides strategic advice to C-level executives at vendor and end-user organizations. By developing a strong research-based expertise, Ring is focused on the areas where global IT service delivery model is changing, including cloud services, the evolving CIO role, innovation, sustainability and global sourcing of labor.

Interview about contract management software

The following is a re-written abstract of the article ‘Cloudtract offers free cloud-based contract management’ in which Business Technology Analyst Katy Ring. Please go to the website of 451 Research and subscribe to read the original article as written by Dr. Katy Ring.

With the uprising of license models, organizations are finding it harder to take care or cancellation and renegotiation periods or even the notice periods of contracts. These changes made it more difficult for businesses to keep track of contracts and their contractual expiration dates and assessment processes regarding potential renewal, cancellation or renegotiation of the terms and conditions.

Contract management in small- and medium sized businesses seems to be more of an additional task for office managers and line- or business managers, rather than a core activity. Even the larger companies with procurement departments are affected by the arrival of cloud-based models in businesses, making contract management a more extensive task that requires the cooperation of business managers, procurement managers and other stakeholders. The innovation of contract management solutions should point to an improved integration towards IT- and business service management platforms, enabling the support businesses needed for implementing SaaS-integrated technology. As contract management based on cloud technology is growing, Dutch startup Cloudtract is here to offer businesses a free contract management tool in the cloud.

The 451 Take

Cloud-based delivery models is creating opportunities for new business services, making it hard to establish market share for contract management. Cloudtract offers its simple contract management solution to small and midsized companies for free, aiming to earn money through anonymous data collection, analytics and knowledge of the data without accessing the data and contracts itself. Despite their easy-to-use and simple solution, it will remain a question to which terms this business model will deliver Cloudtract a relevant spot in the contract management market in the upcoming years.

When co-founder Angelique Schouten worked at a midsized insurance company, the company was acquired by a software company, making her required to evaluate the entire contract administration including all related tasks and features. Collecting this information took two months, creating a stall on the evaluation process regarding cancellation and setting up new contracts with new provider set up. All departments involved pointed their focus on setting up contracts with new providers, resulting in forgetting to cancel an IT-contract of €40,000 ($43,000).

To ensure this from ever happening again, Schouten researched the available solutions on the market and concluded that they consisted of expensive pay-per-use and over-engineered contract management solutions, or solution that are embedded in ERP packages. Basically, Schouten only needed an alert functionality that is easily accessible and provides an option to authorize rights to specified roles, so the software company decided to develop a contract management system themselves.

The software company wrote and designed the front-end of the Cloudtract platform, building it from scratch in about a year. After the platform was being used by the company itself and its sister companies, word-of-mouth revealed that more companies were interested in the solution and showed that the system addresses a universal problem. As contract management activities effect and involve all operational staff, the chosen contract management solution should minimally provide an overview of the entire contract administration, including its related actions required. These are the core features of Cloudtract.

With a low cost-base and received funding by cofounders and Amsterdam-based investor Amerborgh, the primary shareholder remains active in Cloudtract, estimating its business continuity to a minimum of 18 months to three years. A period needed before Cloudtract is enabled to monetize its client user-base.

Context

Click here to read more about the actual Dutch article as it was published on the Computable website.

Services

The free and solid service is set up as a private cloud based on an AWS infrastructure, Ireland, empowering Cloudtract knowledge of all their data locations and to assure its clients. Companies can use the system by simply filing in their email address and selecting the sector of their company, and then set an alert by entering the supplier name and picking the chosen alert date. With one click, the details are saved and uploaded. There is an option to fill in even more contract details, and can even upload the contracts themselves and authorize different staff roles for accessing the contract information. All uploaded contracts or other related documents are encrypted, with Cloudtract having no access to them.

Cloudtract has not received any concerns regarding terms of data protection from users, potentially because of its extensive background in the financial service industry. With the company being quite new and in the early stages of business development, new users may feel a bit hesitant to use the service to store their contracts. Countering these concerns, Schouten explains that the system is designed that users can reclaim their data and exit whenever they feel to, by simply one click.

Cloudtract is currently live in a beta version. In early March, the company had 585 companies in 36 countries using the solution. Cloudtract is currently growing at a rate of 5-10 companies a day.Cloudtract is currently live in a beta version. In early March, the company had 585 companies in 36 countries using the solution. Cloudtract is currently growing at a rate of 5-10 companies a day.

Strategy

Cloudtract targets companies with 10-200 employees and has already attracted several large companies that use its platform because its simplicity to deliver quick results in comparison to their existing ERP systems. The professional service branch, such as lawyers and accountants seem to be most interested in the solution. Usage by these kind of administration service providers delivers a multiplier effect in usage due to promotion among their client base.

Managing the usage of SaaS through for example Salesforce.com or managing license models for DevOps teams, is seen as a growing opportunity for Cloudtract, as different user groups are able to sign in at different times within organizations.

Managing the usage of SaaS through for example Salesforce.com or managing license models for DevOps teams, is seen as a growing opportunity for Cloudtract, as different user groups are able to sign in at different times within organizations.

Competition

Cloud delivery models provide businesses low entry barriers resulting in a number of competitors, with many being existing contract management software companies that have launched cloud-based versions. This includes popular players, such as Agiloft and Prodagio Software. Closer competitors for Cloudtract, however, include players like GEP, Ncontracts and Novatus Contract Management. These companies are said to differentiate offering simplified cloud-based solutions. There are similar companies which are also born in cloud, like GettingContractsDone or Onit that also might be considered competitors, despite their rich-featured, and perhaps over-engineered, contract management solutions.

SWOT analysis

Analyst Katy Ring concluded the article with a SWOT-analysis of Cloudtract to indicate the company´s strengths, weaknesses, opportunities and threats. The strength of Cloudtract is its focus on growing their simple contract management proposition in the market, while staying true to its simplicity. The weakness is that the service is designed to be very lightweight, meaning that users who are in need of support, training or the ability to integrate it with other applications, are required to be self-reliant. The opportunities of Cloudtract lie in the offering of white-label applications to managed service providers, which will create greater market share rapidly. The biggest threat for Cloudtract could be the resisting customer churn, due to lack of a professional service wrapper that solidifies its proposition.