Two weeks back I had the chance to catch up with Tim Minahan to trade thoughts specifically on the state of the Ariba/Procuri product integration. It was a great call from an information standpoint because Tim knew that I've spoken to a number of Procuri customers of late on the same subject and that there was no room for spin. Just, the facts, sir, in other words. Without getting too mired in my analysis, I'll share with you some of my notes from this call as well as from recent interactions with Procuri customers based on what they're actually seeing (and hearing).
To start, Tim reiterated Ariba's commitment to learn from the Procuri on-demand delivery approach. On the call I learned that 3/4 of the Procuri employee base has stayed at Ariba -- minus, of course, a few key senior management players like Mark Morel who had virtually no role after the deal was closed. The highest level of employee retention has been in customer service and delivery areas where 90% of the team has remained. 80% of the sales and marketing team also stayed on board, as has 2/3 of the engineering group.
At this point, the big question on the minds of the Procuri customers that I've spoken with is how long the Procuri products will be supported. In some cases, customers are getting mixed messages out of the Ariba commercial organization on this. What's clear to me from the call is that Ariba has committed to supporting the Procuri solutions at least through the end of 2009 when they will have delivered an integrated solution (10s1) that will have closed most of the gaps with the features and UIs between the two solutions (10s2 will close the remaining gaps). In the interim, Ariba is committed to delivering Procuri release updates on a quarterly cycle (e.g., 8.0 in January, 8.1 this coming April, etc.) But given the integrated roadmap, I would not expect terribly much in terms of significant upgrades since it is clearly in Ariba's best interest to get Procuri customers onto Ariba solutions as quickly as possible.
When it comes to solution areas outside of sourcing, Ariba appears to be taking an aggressive path to sunset TotalSpend, the old Procuri spend visibility application that was gained through the TrueSource acquisition. I've heard this from at least one Procuri customer who is being pushed to Ariba's spend visibility solution in its place. Incidentally, it would appear that one of the reasons for the more aggressive migration of the spend analysis product is that Ariba is able to deliver more enhanced analytics and services support on top of its own applications than that of the older TotalSpend product. In other areas such as contract management and supplier management (i.e., the supplier portal tool), I'm getting the sense from the market that it's not as easy a decision on which products for the Ariba commercial team to go to market with into the Procuri customer base because of functional and UI differences between the different solutions.
Clearly, at the end of the day, Ariba is in a transition period with the Procuri customer base. Keeping everyone happy is impossible (and as Iasta and Emptoris will attest to, there are customers investigating alternative options). But the key is keeping as many of them satisfied as possible in the transition period. Will Ariba succeed at this? I'm certain you'll see Ariba claim victory at LIVE about the percentage of customers which have remained, but at the same time, I also know that their competitors will trot out defectors into the limelight like a rogue Islamist group showing Western prisoners on al jazeera who've come around to the other side of the cause. But in this case -- unlike the plight of the nutty jihadists -- there is no right or wrong side. Rather, there are customers looking for deals -- from both parties. And may the best vendor win in each circumstance.
- Jason Busch