Earlier in the week, I posted a news announcement of Ariba's latest foray into the on-demand world with its recent 9s5 release. As one astute reader pointed out in a comment, the name "9s5" does not exactly have any market/marketing connation -- in fact, in my view, it flies in the face of the non-software focus of on-demand -- so perhaps Tim Minahan, as the commenter suggests, will get around to changing the release names. I'd second this suggestion. But enough on superficial branding. In today's post, I'd like to expand on my earlier analysis, digging into some of scoop behind the enhancements of 9s5 and what it means for the market. In a final post on the subject early next week, I'll get into even more product analysis detail.
To begin, let me preface my analysis with the fact that I have not demoed the release yet (I intend to spend a number of caffeinated hours at the Ariba product showcase area at LIVE playing around). Still, I have a good sense that if Ariba is claiming functional parity with the installed release in most areas -- and if this statement is true -- exactly how the application stacks up to others in the market. But what is not clear to me at this point is the phase out of the Procuri product line (which I also intend to find out much more about in the next couple of months). I suspect it will be a fast phase out of the Procuri product name and I will also guess based on some early feedback from Procuri customers that they will be encouraged -- encouraged is such a polite word, isn't it? -- to move onto the Ariba product suite as well.
On that note, regarding the integration of the two companies, it was clear from the start who was in charge. Judging by the fact that Mark Morel, Procuri's former CEO, quickly leaped into a new role running a different venture, I'm guessing that he is was only ceremonially kept around following the deal close (despite what Ariba told customers and the market). At no time was there any question which organization was running the integration show. Also, along similar lines, from what I've heard behind the scenes, Ariba does not appear to be taking very much of the product DNA from Procuri -- who really would want to code a truly enterprise scale .Net product anyway -- other than some of the IP from the supplier portal and related CMSI products that Procuri had integrated and planned to enhance for 2008. Incidentally, from what I'm hearing in the market, many companies are taking a hard look right now at the concept of a supplier registration and management portal, so it's a good thing for Ariba to now have this capability and installed -- sorry, SaaS -- base to learn how to incrementally improve it.
But I digress. I'm sure you're just as curious to dig into some of the product implications of where Ariba is headed. Here, I'll posit three key analyses/opinions before saving some additional commentary for Part 2 of this mini-series. First, Ariba really has made the commitment to on-demand. It's not just lip service. But they are realizing some growing pains from an implementation standpoint outside of the sourcing product area, so for anyone considering an immediate roll-out, make sure that you get an implementation team that has experience with Ariba on-demand and can commit to a reasonable time schedule for provisioning and completed deployment.
Second, don't think for a minute that Ariba's long-term play in on-demand will be tied to primarily to sourcing deals (though certainly they'll attempt to stay as close to market parity with SAP, Emptoris and others as they need to in order to win their share of the deals). From some of the pricing I've seen, the on-demand procure-to-pay deals are much more lucrative for Ariba than sourcing, hence I suspect that this will be the primary sales focus -- or the sales goal -- for Ariba's commercial team. In addition, if we are to believe this product parity statement -- which again, I will investigate and confirm at LIVE -- then the on-demand procure-to-pay suite has come quite a long way.
Third, and my last observation for this post, is that Ariba is aiming to be a one-stop Spend Management on-demand shop -- despite having numerous overlapping partners like Fieldglass in their ecosystem. For example, by building out and aggressively positioning their services procurement capabilities in 9s5 such as print, advertising, and temporary labor, Ariba is hoping that they will trump everyone else in the market when it comes to check the box coverage for the entire analyze-to-source-to-procure-to-pay process. It's a good position to be in, but I'd encourage anyone looking at the suite to evaluate all of the individual components on their own merits. Because, after all, the major advantage of on-demand is that plugging in other best-of-breed capabilities shouldn't be that big a deal (which is exactly the strategy that Ariba is betting on when it comes to working their way into the ERP base with an on-demand message).
- Jason Busch