Close
  • Latest News
  • Big Data and Analytics
  • Cloud
  • Networking
  • Cybersecurity
  • Applications
  • IT Management
  • Storage
  • Sponsored
  • Mobile
  • Small Business
  • Development
  • Database
  • Servers
  • Android
  • Apple
  • Innovation
  • Blogs
  • PC Hardware
  • Reviews
  • Search Engines
  • Virtualization
Read Down
Sign in
Close
Welcome!Log into your account
Forgot your password?
Read Down
Password recovery
Recover your password
Close
Search
Logo
Logo
  • Latest News
  • Big Data and Analytics
  • Cloud
  • Networking
  • Cybersecurity
  • Applications
  • IT Management
  • Storage
  • Sponsored
  • Mobile
  • Small Business
  • Development
  • Database
  • Servers
  • Android
  • Apple
  • Innovation
  • Blogs
  • PC Hardware
  • Reviews
  • Search Engines
  • Virtualization
More
    Home Applications
    • Applications

    Ariba Muddles Through On-Demand Transition

    By
    Renee Boucher Ferguson
    -
    July 25, 2006
    Share
    Facebook
    Twitter
    Linkedin

      As it transitions to an on-demand model from an enterprise one, spend management software developer Ariba is suffering in the earnings department. Yet it fared better than the same year-ago quarter.

      The companys total revenues for the third quarter 2006 were $73.6 million, compared to $77.7 million for the same year-ago quarter.

      Software license revenue for the quarter was $6.1 million, compared to $10.1 million for 2005s third quarter.

      Ariba did post some positive results for the quarter in terms of net loss, which was booked at $31.5 million, or 48 cents per share, versus a third-quarter net loss in 2005 of $288.7 million, or $4.52 a share.

      Much of this years loss can be attributed to a $24 million hit on real estate—Ariba has a lot of empty office space in both California and Pittsburgh that its still paying for.

      Subscription and maintenance revenue for the quarter were $31.6 million for the quarter, compared to $30.2 million for the same quarter in 2005.

      The important number to pull out here, given Aribas on-demand strategy, is the subscription software revenue, which logged in at $13.3 million, as compared to $11.8 million for the same year-ago quarter.

      “One year ago, our growth strategy centered on transitioning to an on-demand business model. While we remain focused on improving revenue, I am quite pleased with the progress our organization has made in its transition,” said Bob Calderoni, Aribas CEO.

      “We started out with a lot to do. We re-engineered 100 percent of our products while continuing to invest in our customers. We developed out-of-the box solutions and new delivery models. We opened the Ariba Network to non-Ariba customers, and retrained all of our customer-facing employees on the new products, and new go-to-market strategy.”

      During the third quarter, Ariba released on-demand versions of its namesake Procure-to-Pay, Electronic Invoice Presentment and Payment, Travel and Expense, and Contract Management for its Basic and Professional customers.

      Add those to the multi-tenant versions of Ariba Sourcing and Spend Visibility, released earlier, and the company has a full suite of on-demand products, according to Calderoni.

      And while the company has a lot of that work under its belt, it still has quite a ways to go, according to Calderoni.

      To improve margins, Ariba is focusing on three key areas: Monetizing the Ariba Supplier Network; building its on-demand business; and providing connectivity solutions for SAP AG and Oracle customers, a combined installed base of about 65,000 customers.

      Calderoni said he is buoyed by the results in the quarter.

      /zimages/4/28571.gifTo read more about Aribas pursuit of the on-demand trend, click here.

      The company garnered 40 new subscription-based customers, and its sales cycles were winnowed down to weeks rather than months.

      The bulk of the transactions were made up of sourcing and networking solutions, and about half were companies measured in revenue below $5 billion.

      “I believe this is a very important metric for us,” said Calderoni, in Sunnyvale, Calif.

      “Last year we were averaging 15 percent net new business; this year, its more than double that.”

      Calderoni said he is also encouraged that the company has embarked on the right strategy based on a lack of competition in the small and midmarket sector (which Ariba recently entered), since those companies have yet to actually make technology acquisitions from large competitors like SAP and Oracle.

      “All said, the transition of a company that has the DNA of an enterprise company is not a small task; its a matter of changing the way each and every person in the company thinks of it,” said Calderoni.

      “Enterprise pushes for big commitments up front; on-demand is not to force big commitments up front. We have a long way to go before I can say the DNA conversion has happened in the company. There are clearly signs that its happening, but Im not gong to sit here and say its done.”

      /zimages/4/28571.gifCheck out eWEEK.coms for the latest news, reviews and analysis about productivity and business solutions.

      Renee Boucher Ferguson

      MOST POPULAR ARTICLES

      Cybersecurity

      Visa’s Michael Jabbara on Cybersecurity and Digital...

      James Maguire - May 17, 2022 0
      I spoke with Michael Jabbara, VP and Global Head of Fraud Services at Visa, about the cybersecurity technology used to ensure the safe transfer...
      Read more
      Cloud

      Yotascale CEO Asim Razzaq on Controlling Multicloud...

      James Maguire - May 5, 2022 0
      Asim Razzaq, CEO of Yotascale, provides guidance on understanding—and containing—the complex cost structure of multicloud computing. Among the topics we covered:  As you survey the...
      Read more
      Big Data and Analytics

      GoodData CEO Roman Stanek on Business Intelligence...

      James Maguire - May 4, 2022 0
      I spoke with Roman Stanek, CEO of GoodData, about business intelligence, data as a service, and the frustration that many executives have with data...
      Read more
      Android

      Samsung Galaxy XCover Pro: Durability for Tough...

      Chris Preimesberger - December 5, 2020 0
      Have you ever dropped your phone, winced and felt the pain as it hit the sidewalk? Either the screen splintered like a windshield being...
      Read more
      IT Management

      Intuit’s Nhung Ho on AI for the...

      James Maguire - May 13, 2022 0
      I spoke with Nhung Ho, Vice President of AI at Intuit, about adoption of AI in the small and medium-sized business market, and how...
      Read more
      Logo

      eWeek has the latest technology news and analysis, buying guides, and product reviews for IT professionals and technology buyers. The site’s focus is on innovative solutions and covering in-depth technical content. eWeek stays on the cutting edge of technology news and IT trends through interviews and expert analysis. Gain insight from top innovators and thought leaders in the fields of IT, business, enterprise software, startups, and more.

      Facebook
      Linkedin
      RSS
      Twitter
      Youtube

      Advertisers

      Advertise with TechnologyAdvice on eWeek and our other IT-focused platforms.

      Advertise with Us

      Menu

      • About eWeek
      • Subscribe to our Newsletter
      • Latest News

      Our Brands

      • Privacy Policy
      • Terms
      • About
      • Contact
      • Advertise
      • Sitemap
      • California – Do Not Sell My Information

      Property of TechnologyAdvice.
      © 2021 TechnologyAdvice. All Rights Reserved

      Advertiser Disclosure: Some of the products that appear on this site are from companies from which TechnologyAdvice receives compensation. This compensation may impact how and where products appear on this site including, for example, the order in which they appear. TechnologyAdvice does not include all companies or all types of products available in the marketplace.

      ×