Concur Cozies Up To TMCs With Latest Acquisitions

They have said so time and again, but Concur's executives on Tuesday finally may have convinced skeptical travel management companies that they have no intention of competing with them. With the acquisitions of GDSX and TRX, the company once known by travel management pros as a mere expense reporting solution has become a travel management technology juggernaut.

It's not that GDSX and TRX are big companies; they're actually pretty small. But they are such integral TMC partners that Concur's place in the technology stack of corporate travel agencies now rivals that of the traditionally key tech partner, the global distribution system.

"They now have a bigger suite of services to put their hooks into the TMCs," said Travel and Transport CIO Mike Kubasik, agreeing that the deals potentially make Concur the "primary" tech provider for certain TMCs. "They have expense, online booking, duty of care and now mid-office is another piece of the puzzle." [Add to that list TRX's data consolidation and reporting services, which are used by the U.S. General Services Administration, which last year selected Concur to provide travel and expense technology for the world's largest travel management program.]

"GDSX is a massive robotics machine for us," Kubasik continued. "Concur has done a good job of letting the management teams of companies they acquire be independent. We would hope they do they same here and also potentially invest in the products."

Kubasik said his team was surprised by the news. The first reaction by another keen observer of industry developments, ARC CEO Mike Premo, was "wow!" According to Premo, the deals represent "a brilliant strategic move that both takes some potential developers of alternative end-to-end solutions off the market and more tightly integrates Concur into the TMC technology base. With Concur's substantial market capitalization, we can probably expect more moves like this as they seek to consolidate their position."

Jefferies & Co. analyst Ross Macmillan told The Beat that he was informed Concur's goal here is not as much to get closer to the TMC as it is the transaction. "They want to become a hub in corporate travel, and so this expands their addressable market and also gets them closer to the transaction without having to become a TMC," he said. "The value increases as you get closer to the transaction, and they're leveraging the higher, value-added processes like holistic spend management, rate negotiations and so on. They're trying to be as friendly as possible to TMCs who are concerned about the Open Booking initiative and Concur competing."

One of Concur's challenges with Open Booking is how to feed the passenger name record__which TMCs generally want to reside in a GDS__with records for bookings made elsewhere. Concur has proposed a slightly clunky process relying on passive segments, but according to Kubasik, "There's no better way to do that than through a mid-office platform."

Concur is not playing up the Open Booking angle with these deals. Instead, they're about driving innovation and leveraging web services, open platforms, the cloud and the entire "travel ecosystem." But TMCs have no truck with all that. What they care about is servicing customers, and Concur clearly now is an even more powerful enabler.

"These acquisitions are about something broader than Open Booking," Concur president and COO Rajeev Singh said in a telephone interview. "They're about how you take the core technology infrastructure of the TMC and make it part of a broader, open platform to allow the TMCs to connect to the rest of the travel ecosystem. That means developers and app providers who are connected to the T&E Cloud. It's a massive leap in the right direction."

Then he repeated the question: "Does it also provide an opportunity for these technology platforms to better support things like Open Booking? Absolutely."

As TMCs and their customers retain their doubts about Open Booking, another concern is about the future of these key technology providers it has just acquired.

Describing TMCs as "the center of the managed travel ecosystem," Singh said, "Any time you're looking at something as rich and complex as a mid-office solution for TMCs, you have to take a really thoughtful approach on where they want to go next and what to do next. We're telling TMCs, 'We're supporting what you're on and it will be the same people providing it. We'll sit with you and build a long term product strategy.' "

Concur values TRX's data consolidation and reporting solution. Same for the mid-office offerings from both companies, although it remains to be seen whether both of those technologies would be maintained. GDSX also provides pre-trip approval and the Open Booking-ish TripLink.

Concur already has made decisions on certain products and services. It sounds like TRX's expense management solution, for example, is toast. "We'll approach TRX expense management customers about what we think are a pretty cool set of expense management products from Concur," said Singh. "We'll do that in the short term__not only to convert but also retain them. It's a modest customer base on their tool."

Concur also said it would not retain TRX's business process outsourcing and call center business units, which "are not aligned with Concur's strategies." The company intends to "identify strategic partners that are better positioned to support the ongoing operations."

Singh declined to comment in detail about any plans for management changes, layoffs or consolidation of facilities. "This is about growing, innovating and delivering more value," he said. "Our message to employees of TRX and GDSX is, 'Welcome to the Concur family,' and we want every one of them to stick around."