Ariba Sets Out on a Vertical Course

 
 
By eweek  |  Posted 2001-05-07 Email Print this article Print
 
 
 
 
 
 
 

The B2B software maker scraps ambitious plans and returns to its roots.

Ariba is redrawing its road map, but the highways all look the same.

After scrapping its much-touted acquisition of Agile Software, and posting a shockingly bad Q1, the B2B company last week outlined plans to make do with what assets it had left. That includes its Buyer e-procurement application, which accounts for the bulk of the companys business, as well as its Sourcing application and Commerce Services Network.

But the company offered little guidance, financial or otherwise, of where its headed and how its going to get there. "The message here is we are going to focus on our roots, go back to basics," says Larry Mueller, whose promotion to CEO and president was the biggest news that came out of the Ariba Live user event last week in Las Vegas.

"Were not going into manufacturing collaboration or design collaboration," says Mueller, in reference to the plans described by the company in February at a Radio City Music Hall event celebrating its then pending $2.5 billion acquisition of Agile, a maker of collaboration software.

About-Face Whats changed, besides the precipitous drop in Aribas stock price that killed the merger? Agiles software focuses on "a very narrow industry and a slender process, and we dont need that piece right now," Mueller told Sm@rt Partner last week.

So to better leverage its existing portfolio of products, Ariba, like its competitor Commerce One, is reorganizing its operations around key vertical markets. In Aribas case, those industries are financial services, high tech, automotive, consumer packaged goods and pharmaceuticals.

Mueller says the move to "verticalization" will be enforced throughout the company, including sales and consulting as well as product development and management. "In financial services, for example, we have the top 35 institutions but we should have the next 500, too," says Mueller.

Engine Overhaul As part of that, Ariba is overhauling its partnership strategy. In the heady days of B2B, the company was swamped with proposals from potential partners and paired up indiscriminately, says Mueller. "We didnt do a real good job with the management of partnerships," he says.

"Were reevaluating many of them, and we will have fewer, and well package those partnerships in a way that Ariba controls the account," he says. "But the ones we keep will be much more important. Its no longer about press releases."

Mueller declined to comment about new partnerships but pointed to deals with Syncra Systems, maker of supply-chain software, and Zeborg, maker of procurement analytics software, in which Ariba will resell their software, as the type of arrangements the company is looking for. Michael Schmitt, Aribas chief marketing officer who joined the company two months ago, is in charge of the partnership program.

New Allies At the event, Schmitt was asked about the companys relationship with a handful of specific vendors, all of which have been rumored to be interested in acquiring Ariba. In regards to Manugistics, the supply-chain competitor to former Ariba partner i2 Technologies, Schmitt says, "Manugistics is not a partner now, and customers are not asking for it." And in response to a question about CRM vendor Siebel Systems, Schmitt responded, "They are the clear gorilla in anything that touches the customer. Were in the back end. There is no partnership today, but I see potential there."

Then there is always IBM, Aribas most visible partner. At the show, IBM announced Leveraged Procurement Services, a suite of services for Ariba products that are focused on supplier enablement. The pair also announced that IBMs WebSphere Application Server would be the primary platform for future releases of Aribas apps.

Despite its recent acquisition of Informix Software, IBM is quicker to partner with rather than acquire other companies, particularly vendors like Ariba that make applications, an area IBM generally steers clear of. And despite its size, IBM doesnt want to be all things to all people, says Jay Ennesser, VP of IBMs B2B/e-market sales. Ennesser says IBM isnt like Microsoft, which moves into new application areas, or Oracle, which he says tries to go it alone. But when it comes to partnerships, IBM leads, it doesnt follow.

 
 
 
 
 
 
 
 
 
 
 

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