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SPS Commerce Idea Proposal (SPSC)

SPS Commerce Idea Proposal (SPSC)

Are existing customers expanding wallet share with SPS Commerce?

Report Available: June 6, 2019


Blueshift’s initial research found SPSC benefiting from the retail market’s ongoing digital transformation and posting 73-consecutive quarters of top line growth. SPSC’s network of 80,000 companies across 60 countries is powering the company’s growth as customers adopt SPSC’s cloud-based sourcing, fulfillment, Electronic Data Interchange (EDI), and analytics products and solutions. Increasing revenue from its existing customer base is one of SPSC’s most important growth initiatives.



  1. SPSC reported strong Q1 results topping expectations with a 13% increase in revenue and a 14% increase in recurring revenue. Adjusted EPS of $0.60 also beat expectations. Fueled by retailers’ demand for business process automation and increased efficiency, SPSC expects 2019 full-year revenue growth of 11%. The company continues to execute its growth initiatives which include further penetration of its current market, increased revenue from its existing customer base, expansion of its distribution channels, international expansion, expansion and enhancement of its products and services, and strategic acquisitions.
  2. In late 2018, SPSC furthered its growth with two acquisitions that enhanced the company’s technology and expanded its customer base. EDIAdmin, a leading provider of supply chain integration technology and former SPSC integration partner, was acquired in October. CovalentWorks, an EDI-software company, was acquired in December and brings 2,000 additional customers to the SPSC network.
  3. In March, SPSC’s product enhancements and improvement initiative got a boost when it launched an updated fully-embedded EDI solution for the SHOP e-commerce platform. The app brings SPSC’s Fulfillment solution to the 800,000 companies using the Shopify platform. The SHOP retail seller can download the SPSC solution and launch it in its SHOP platform, ensuring that it will have 100 percent EDI compliance with its suppliers.
  4. SPSC is gaining recognition as the market leading EDI provider and was named one of Acumatica ISV’s partners of the year in 2018. In January Capterra, a Gartner company, ranked SPSC as the most popular EDI software. SPSC achieved a top score of 97 based on customers, users, and social media presence. Acumatica, a cloud-based ERP provider, named SPSC a partner of the year for helping generate the greatest number of migrations to Acumatica and license revenue in 2018.
  5. Headwinds that could slow SPSC’s growth include the lack of tech talent available in the company’s headquarter city of Minneapolis where it has 50 to 100 tech related positions open on any given day. Another constant challenge is the crowded and highly competitive EDI solution market. Key competitors include IBM and OTEX, which also has an acquisition growth strategy.
  6. Blueshift last reported on SPSC in Oct. 2017. Retailers, suppliers, and consultants said sales for SPSC and the entire electronic data interchange industry will be driven by the shift to ecommerce, demand for analytics, and most retailers’ requirement to interact via EDI. SPSC’s strengths included a solid reputation, talented employees, retailers’ recommendations of SPSC to suppliers, and the company’s comprehensive, easily implemented EDI solution. SPSC’s expanded analytics solutions would allow it to attract and expand among new and existing customers alike.


What is the level of market penetration for SPSC products with both enterprise and SMB customers? Which SPSC services are enterprise and SMB customers using? What is customer willingness to expand to other services from SPSC? What are SPSC’s upsell opportunities? Is there meaningful revenue to be generated by SPSC on the retailer side? Are SPSC’s analytics products gaining traction? To answer these and other questions, Blueshift will gather data and issue a market research report from independent sources in the following areas: Retailers, Suppliers and Distributors using SPSC, Consultants and Third-party Logistics Providers, and Industry specialists.


Companies: SPS Commerce Inc. (SPSC), Inc. (AMZN), IBM Corp. (IBM), Open Text Corp. (TSE:OTEX), Oracle Corp. (ORCL)


Research Begins: May 20, 2019



To see other ideas Blueshift Research is currently working on, please click here.


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