A new investment and marketing deal with Concur puts American Expressin the position of offering clients conflicting travel and expense integration models from two companies in which it has investments. Also announced during the National Business Travel Association convention here, a Rearden Commerce deal for expense provider ExpenseWire promotes a philosophy of openness with regard to integration, while Concur has generally refused to integrate its expense system with booking tools other than its own Cliqbook.
One industry veteran called the Amex deal for Concur the "biggest story at NBTA" and said Concur's people were "giddy" while officials with Rearden and Sabre's GetThere--the lone preferred Amex booking tool until Amex first invested in Rearden in 2006--showed "lots of concern."
Rearden Commerce CEO Patrick Grady told Management.travelthat he believed American Express would only sell Concur Expense "in connection with the corporate card," which is how Amex positioned the Concur announcement. But the Amex-Concur deal is mainly about lead generation; Concur is free to sell its travel application to prospects delivered by Amex, said Concur CEO Steve Singh.
"Card rules the day at Amex, so a relationship with card will trump one with travel," said one observer.
Upon acquiring ExpenseWire, Rearden immediately announced booking integration deals with Orbitz for Business and TRX. Travel booking and expense management software providers for years have promoted the benefits of prepopulating expense management systems with booking data. Since it bought Cliqbook in 2006, though, Concur has trumpeted additional benefits of having both tools offered by one vendor.
A conflict between Amex's competing investments would be less apparent if Concur wasn't so aggressive about travel-expense integration. About 40 percent of its sales nowadays include both tools, the company told investors during a conference call this week. Singh asserted that by the end of next year, "it will no longer be the norm to buy a standalone travel booking service or a standalone expense reporting service. Integrated travel and expense will become the minimum requirement."
Given this mantra of joining travel with expense, it remains to be seen whether the American Express deal will change Concur's philosophy about integration, particularly when it comes to the GetThere and Rearden booking tools offered by American Express Business Travel.
Concur founder and executive vice president of marketing Michael Hilton this week said the company is "open to discussions" about integration. That was news to Rearden's Grady: "Notwithstanding their recent comment, you can't find two companies more different than Concur and Rearden Commerce. At 30,000 feet, it's perfectly understandable, but fundamentally wrong, to believe we're similar. We fundamentally, completely, believe in choice, usability and forward migrations with customers. Concur does not, and their actions would support that comment. If you are trying to lock in customers and not give them choice, that's because you know you can't compete on the innovation curve. We're never going to play this lock-in game where I tell customers they have to go with Rearden Travel and Rearden/ExpenseWire.
"I'm not so arrogant as to say we're better," Grady continued. "Let the customer and the industry decide what they want."
Hilton's latest comment seems to leave a door open, but he also said in June that, "We are not integrating with other booking tools." Concur has "struggled to get to a meaningful integration level," said Hilton this week. "Issuing a press release saying that you're going to integrate is not that meaningful." Integrating expense and booking technologies is "a lot of hard work," and Concur has "struggled to get a mutual commitment" to take on the task, he said.
Explaining why TRX would integrate its Resx booking tool with an expense system (ExpenseWire) that is owned by a competitor (Rearden), TRX executive vice president Shane Hammond asked, "Why not? Our core business as it pertains to the booking side is online booking, and there are a number of really good players in the expense arena. Because we have spent so much time and effort on our Web services platform, we can integrate with any or all comers to a degree that's equal to a Concur-owned expense and booking platform. They would say that's not the case. We don't have integration with Concur. Contrary to what I've read about them being willing to integrate with other booking engines, we've never actually seen it happen." TRX CEO Trip Davis added that Concur "has explicitly refused to do so on a number of clients."
Asked about Concur's argument that there are benefits from greater integration that can be implemented when both tools come from the same vendor, Hammond said: "I don't think there's any special sauce there. It's two products communicating with one another in a simplistic Web services platform. It happens every day. So, you have to be the buyer and make your own decisions."
Orbitz for Business senior vice president and COO Dean Sivley said Rearden's acquisition of ExpenseWire emerged after months of talks between himself and ExpenseWire on what now becomes a private-labeled expense management offering for Orbitz for Business. "We were in final redlines when this came up with Rearden," said Sivley. "Obviously some could ask, 'Isn't Rearden a competitor to you?' They're not a travel agency, but they certainly are a competitor in terms of an online booking tool. I said [to ExpenseWire], 'You could have made me a lot happier if you were acquired by someone else,' but at the end of the day ... you can be competitive in certain areas and in others, it makes sense to partner. Amex-Concur makes me even happier because one of the things that would have been on my mind was, 'Well, Amex has an investment in Rearden. How strategic would we be to them when it comes time to do things with expense management?' "