As SAP unifies its cloud portfolio around HANA I have been attempting to put together different pieces of the puzzle together in my free-time. This time I thought something on Ariba would be fitting. After all spending over $4 Billion for this acquisition better mean something significant 🙂
So what is Ariba?
Ariba is a cloud-based B2B enterprise business commerce solutions provider. Ariba is considered the leader in Enterprise Spend Management (ESM). ESM basically encompasses analysis, sourcing, buying, contracting, invoicing, and managing of the workforce.
SAP is already in the procurement and supply-chain game. So why invest in Ariba with which it has various similar modules?
Over the past few months it has become increasingly clear there are two reasons –
1) As part of SAP’s Cloud Strategy
2) Ariba’s Network
I’ll skip SAP’s cloud strategy for now. Over the last few months SAP seems to have taken strides in the right direction to being a ‘cloud’ company. It’s going to take time. They are not yet a Google or NetSuite or Salesforce, but I don’t think they are so late and unprepared that they cannot reach the targets they’ve set themselves in the coming 18 to 24 months. They’ve got a single platform cloud strategy. They’re working towards the infrastructure level. Developers (external and internal) are building enough applications to cover the stack well. The SAP cloud strategy deserves some attention and I intend to do that justice. I’ll write a post on that soon. All in all SAP has realized, the cloud-wars are going to be won on services and if they need that, then they need a solid platform and partners.
So, let’s move to the next point. With the growing market of e-sourcing, SAP thinks leveraging the Ariba Network is their best shot at reaching out to a whole new customer base and provide “value” to existing clients. Exactly if this is what happens is another story. The Ariba Network (very simplistically) is a hub where suppliers publish electronic catalogs and buyers route their purchase orders to suppliers. The network connects thousands of buyers and suppliers on-line. It provides a secure and unique channel for corporations to meet and select suppliers on a global basis while also transact.
Ariba is meant to create a new “business network” of buyers and supplies of SAP and non-SAP products, connecting suppliers, customers and partners of SAP and non-SAP products. Imagine what SAP can do with that kind of network and information – let’s think analytics and BI…….
An interesting bit is to see what Ariba sells. Ariba has its own products for buyers and sellers on the Ariba network. For example –
For the Buyers they have — Spending Visibility, Sourcing, Contract Management, Procure-to-Pay, “Supplier Discovery” (to find new suppliers) and Supplier Management
For the Sellers they have — “Discovery Service” (to find new buyers), Sourcing, Contract Management for Sales, Order and Catalog solutions
The changes like AribaPay is also an attempt to move in the mid-market and SME spectrum, not merely a transaction optimization mechanism. Thereby doing two things – one is increasing addressable market. If a supplier can get his money on-time and keep track of every ‘request’, and the buyer has a list of all procurements and a rate list to negotiate – even the fragmented smaller pieces will want to be part of the game. Two – force themselves to create partnerships with forces outside the SAP flagship.
Ariba is clearly positioning itself as the “network” while SAP is clearly continuing to work on their strategy of S-M-A-C (Social – Mobility – Analytics – Cloud). Ariba has the goal to integrate these elements of S-M-A-C on their “network” building applications, platforms and partnerships to have a vertical and horizontal presence across enterprise as well as SME’s. Am I hearing the words “all-pervasive-like-the-ERP-times-again” 😉
Short post but time to get back to studies! I’ll end by saying – Life is an amazing teacher. The last few months of my life have been as entertaining (sarcasm) as anyone might hope for. But, it’s not all bad – because of the immense support I have received from different directions! Ariba spoke of the networked economy! I’d like to talk about the support in a networked world. Some of the staff and organizations at my university at the TU Delft supported the Gift a Smile charity and showed how easy it is to make a difference if you are willing to. They helped bring education and a smile on a child’s face for more than a year. They reinstated my belief that it’s the little things in life that count, and to make a difference you can start with spending even as little as you would on an evening snack!