July 11, 2007 - Concur Technologies' recent signing of
Hewlett-Packard to a global travel booking deal helped validate Concur's 2006 acquisition of Outtask and its Cliqbook tool. Meanwhile, the Concur mantra on travel and expense integration appears to be winning supporters on Wall Street and, according to the company, among clients. Chairman and CEO Steve Singh last month spoke with
Management.travel about the second of those developments.
On a recent earnings conference call, you talked about a "Travel 2.0" version, or vision, of the booking and expense tools. Can you elaborate on that?
It is the Travel 2.0 version, and what we see is not just what most companies are defining as Travel 2.0. We are leading the charge to personalization relative to interoperability and plugging and playing with all global distribution systems ... in fact, we've been doing that for years. It's not just providing content to GDSs; it's also about direct connects. But we think Travel 2.0 doesn't stop with just booking travel content. It's all things related to travel, such as meetings, and it goes beyond that, to the ability to integrate travel and expense reports together ... and innovations such as
e-receipts. One of the most cumbersome parts of filing an expense report is all the receipts that have to go along with the expense report. What if we could take 95 percent of those receipts and move them from paper to electronic form to begin with? The ability to take content and source it electronically drives amazing cost reductions for our customers and suppliers, and makes the end-user experience fantastic. We're on track to ship that product by our next user's conference [in November].
Regarding the integration of expense and travel, there has been some
back and forth in the industry on just how far that takes people. On your last earnings call, you mentioned that 25 of the 400 newest customers had bought the integrated suite. Is the integrated suite a pricing thing, where you can get a better price for buying two, or is it a functionality thing and how so?
As of last October, we launched travel integration 1.0, which allows you to book a trip, click a button, and it takes that itinerary and automatically starts your expense report for you and brings information from your corporate card relative to that trip. That's really the first generation. With Travel 2.0, the products are one and the same. It's a simple task where you book trips, it automatically goes on your expense report in real time and brings in supplier e-receipts on a real-time basis. So, pricing is just one component. The real value equation is driving the cost structure down for corporations [and] suppliers, and making things easier for travelers. You can only do that by having the integrated user interface and data.
What you called the "1.0" function of bringing data into your expense report from a booking system is something Concur Expense was doing with other self-booking tools, before
Concur bought Cliqbook, right?
We have done that in the past with select booking tools, but the depth of functionality we can provide by owning both pieces of the equation is more compelling. There are a lot of folks who are scrambling and trying to determine their strategy, and downplay the value of integrated travel and expense services. All these things are competitive marketing positions. What matters is how the customer sees this service. Is it a fundamental change in the way they book travel, file expense reports and the vendors that they use? That's why what you saw in growth of cross sales is a powerful indicator.
If the power is so clear, why didn't Concur purchase a travel-booking tool earlier than last year?
One of the fundamental changes we have seen in the overall corporate travel industry is that more and more corporations are moving travel under finance or procurement, which was a significant change point for us. Corporations started looking at travel spend the same way as they look at spend in any other part of the organization, where professional procurement policies applied. Related to that was that we were already selling into the finance and procurement organizations. That was really the change that drove our push to integrate these two services together.
You have revealed a plan to double revenues from outside North America over the next several years. Is that about following your customers or getting there first?
The expense management software decision has historically been global, but in travel booking that has not always been the case. What we're finding is that the buyer is starting to look at this decision as a global decision. The next factor is that today there are no truly global booking tools, and you're going to see some significant announcements in the coming months from Concur driving content and driving tools to be global in nature--and driving our marketing and distribution capacity on a global basis.
