By Jason Busch on June 4, 2010
Ariba is coming out of LIVE on the up-and-up. With strong quarterly revenue and margin performance and a unified company message (i.e., the “cloud”), Ariba’s appearance has not been better in a decade. Yet in the past few weeks, I’ve given quite a bit of thought to recent discussions with Ariba customers/prospects, partners/former partners and competitors. These notes, when combined with my own observations and direct recent interactions, suggest a pragmatic, market-driven need to temper this optimistic outlook by stopping to pause to ask a few important questions, many of which are directly tied to customer wants and needs. Even if you’ve bought into the new cloud orientation and worldview, it’s worth considering the following areas and their implications on the alignment of Ariba’s strategy with what the market is looking for:
- Recent price aggression. Ariba has been very aggressive recently in a number of deals we have tracked, including those where two competitors have partnered together to compete against Ariba for broader footprint deals. Consider recent bundled source-to-pay deals at a fraction of what they used to cost (even six months ago) in the Fortune 1000 that suggest a willingness to give up both immediate and SaaS “license” revenue in exchange for an NPV calculation based on other out-year revenue numbers (e.g., supplier-paid network fees). The problem is that customers might not know the value of the NPV pricing when it comes to future fees, including supplier generated revenue (which buyers will inevitably end up paying something for down the road, but might not fully be aware of up-front, given fee changes and other new ways of getting suppliers to pay, even if they derive new types of value in the process)
- CD customers (from a functional upgrade/release perspective) are not necessarily receiving the same treatment as larger SaaS prospects…
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Posted in Business | Tagged Ariba, business process outsourcing, procurement, SaaS, software as a service
Obsessed with how companies manage, spend and save money, Jason writes about procurement, trade and supply chain issues @
Spend Matters. He has significant first hand experience developing and marketing technology and services products, has advised numerous companies on sourcing and related techniques as well as M&A pursuits. In previous lives before tech, he was a management consultant and merchant banking analyst.
Ariba is coming out of LIVE on the up-and-up. With strong quarterly revenue and margin performance and a unified company message (i.e., the “cloud”), Ariba’s appearance has not been better in a decade. Yet in the past few weeks, I’ve given quite a bit of thought to recent discussions with Ariba customers/prospects, partners/former partners and competitors. These notes, when combined with my own observations and direct recent interactions, suggest a pragmatic, market-driven need to temper this optimistic outlook by stopping to pause to ask a few important questions, many of which are directly tied to customer wants and needs. Even if you’ve bought into the new cloud orientation and worldview, it’s worth considering the following areas and their implications on the alignment of Ariba’s strategy with what the market is looking for:
