Friday Rant: What's to Come for Ariba?

Anyone who says they can predict the future should be tarred, feathered and forced to use one of the earlier versions of ORMS to requisition their own tombstone. But I'm not here to predict the future -- only to cast my prognostications about it in this quick rant. And in regards to Ariba, when I peer into my Spend Management crystal ball, I see three things based on my recent interactions, product analyses, customer discussions and channel checks. Down and dirty, here they are.

First, Ariba's solutions are in the process of emerging from a massive transition. Anyone who thinks they know them and who is not familiar with the new direction, capabilities and differentiation should take a seat in the corner. I'm suitably impressed in this regard and see big things for Ariba in regards to customer traction and product innovation in the coming year. This is not the Ariba we all knew 12 months ago. Or even 6 months ago for that matter.

Second, Ariba continues to alienate VARs and channel partners, doing little to successfully create an ecosystem that endears resellers or integrators to them. Sometimes it's better to be the US than the UN, but if they're going to go it alone, why not make the case outright and stop with the false starts. Here, my prediction is that Ariba will miss out on channel opportunities when their partner ecosystem looks to other providers where they can make more money (and with providers who really want to work with them). Ariba's biggest mistake in the past 12 months in this regard has been a failure to build the VAR model successfully for its SaaS solutions (according to VAR partners I've spoken with). I estimate that <10% of SaaS deals have come through a channel.

My last prediction for Ariba -- and many have been saying this for years -- is that they fail to remain independent before the clock strikes January 1, 2011. There's simply too valuable an asset here waiting for someone to unlock as traditional enterprise software models stumble and ERP upgrade cycles flounder. Who will it be? I'm not sure. But I'd bet with greater than 60% probability on a buyout in the next 18 months.

Jason Busch

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