@davidhohn Primarily googling but I have been involved in the enterprise software space on and off for the last 10+ years,through the lens of the tech startup world and generally trying to disrupt larger players. So over that time you can't help but bump into industry leaders like SAP. I haven't really been involved with Fieldglass at the transactional level, but this category of software and business model follows a fairly standard pattern.
And there is a genuine need for enterprise software to deal with managing higher volumes of contracted/gig workforces or complex supply chains etc. Historically this would be a piece of software that somebody like McGH would pay for directly based on some type of ROI analysis that said we spend X for Fieldglass every year but save Y on managing all of these contractors and or suppliers. And essentially it would just be one of their line item costs.
But in this case SAP (and other VMS software providers) has implemented one of the holy grails of business models for enterprise software: get the downstream user to completely or largely offset the cost of the software to the decision maker, by charging them (the supplier) a percentage of their revenue stream. An infinitely more expandable market value not tied to a fixed monthly cost or annual fee, traditionally paid by someone like McGH. And on top of that they get the network effect from suppliers onboarding into the system now ready to go for the next McGH, already pre conditioned.
So now SAP has a painless meeting with McGH. Something like this: "McGH thanks for meeting with us (SAP) today. Fieldglass is an incredible platform with every industry leader using it to manage the complexities and compliance monitoring for the ever growing volume of contracted workforces and 3rd party suppliers. On average we save companies like McGH 15+% a year compared to trying to manage this with your own team members or in house software solutions. But here's the best news: you dont have to pay us anything. We'll deploy it, train your staff, and maintain the software through a convenient SaaS model and charge your suppliers a small service fee." McGH purchasing team looks at each other and says,"where do we sign?"
It is possible McGH is paying some amount to SAP as there is a spectrum of hybrid to full supplier funded pricing models. And there is a legitimate arguement to be made that a supplier can benefit from this but it is very difficult to see how the illustration contracting world dynamics receive that level of benefit, and certainly not on a revenue based percentage fee that is not tied to any explicit basis for that received "value." What is also interesting is that a number of invoice payment systems , quickbooks, etc do a similar model, but in the opposite direction, where they charge the company trying to pay their bills to the suppliers a service fee.
whew. sorry for the long post.