In terms of organic growth, our intelligence suggests that Ariba is actively attempting to build a channel partner, technology partner and BPO ecosystem. On the BPO front, Spend Matters believes these efforts are genuine, and we are aware of numerous potential partners that Ariba has approached in recent quarters. Still, Ariba will have an uphill battle when it comes to unseating Emptoris at BPO providers such as Accenture and IBM from a sourcing standpoint, and it's likely that both large and boutique BPOs alike will need to remain more neutral and accommodating in the P2P area given unique customer requirements in each engagement. BPOs have overwhelmingly gone down a best-of-breed approach in the spend analysis area to date, and Ariba has not captured a material portion of this market to date (contract management, supplier information management and supplier performance management don't have material traction within many BPOs at the moment from a technology enablement perspective).
Commercially, Ariba continues to price itself at all ends of the market depending on how competitive it believes a particular deal to be. This goes for both the up and downstream areas. Spend Matters recommends that all potential Ariba customers make it known early in the sales process that they plan to introduce competition into the process, and for Ariba to put forth its best pricing early on. This situation might help Ariba as well, considering that if many organizations knew the floor of what Ariba charges in certain cases today, then they would be less inclined to consider alternative solution options, even if they presented a better fit than Ariba's specific capabilities given even unique customer requirements. From a price guidance perspective, organizations should be aware that it is possible to obtain the entire Ariba SaaS suite, depending on a variety of factors including competition and the size of the organization, for materially less than what they might believe (it's our experience that if Ariba wants a deal, they will not be underbid). However, companies should factor in supplier network fees into the price equation in the downstream area as well.
- Jason Busch