Hangovers Set in Before the Party
In the next two weeks, both Ariba and Commerce One will host their annual user and partner conferences, but the atmosphere at the events will be decidedly different. While the mood for both B2B rivals will be dampened by their respective disappointing Q1 results, Ariba will still be popping aspirin at its event.
Both companies issued warnings earlier this month, but Commerce One, which expects to report $170 million in revenue for the quarter, seems poised to bounce back, while Ariba, which expects $90 million in revenuehalf of what it had expectedmay not recover anytime soon.
Commerce One, at its eLink conference this week in New Orleans, will feature Microsoft CEO Steve Ballmer, via satellite, in a joint announcement that Microsoft is loaning the company $25 million to develop a version of its Marketsite marketplace software for Microsofts .Net technology. That deal will be one of a series of new partnerships Commerce One plans to announce to bundle its marketplace software with hardware and software vendors, says Steve Viarengo, director of solutions strategy at Commerce One.
Also, Commerce One will highlight its successful partnership with SAP, discussing SAP technology that it will embed into its marketplace software. In addition, it will unveil new financial services provided through third parties that include electronic invoice presentment and payment.
The company also may introduce its latest hire, Dennis Jones, the well-known former FedEx CIO who joined as COO and vice chairman.
Contrast that with Aribas event next week in Las Vegas, where much of the talk may be about doomed partnerships and possible executive exits. On top of its revenue shortfall, Ariba scuttled plans to acquire Agile Software, which it needed for its value-chain management strategy.
That followed with the breakup of its partnership with i2 Technologies after the supply-chain management software maker bought Ariba competitor RightWorks. Ariba also plans to lay off 700 employees, and it is rumored that a pink slip could go to either Larry Mueller, president and COO, or Keith Krach, chairman and CEO, who took responsibility for the companys dismal Q1.
These developments are differentiating the two companies that analysts and the vendors themselves say should never have been compared. "I think theyre both playing to their strengths," says Barbara Reilly, VP at Gartner Group.
"[Commerce One] started with a vision of marketplaces, and Ariba started from procurement. This is just back to the roots in many ways," says Reilly.
Commerce Ones Viarengo sees it a little more harshly. "We had the solutions all along, and [Ariba] didnt."
But both companies still face Wall Street and frugal CIOs, who are the harshest critics of all.