This week, Ariba is holding their annual US-based edition of LIVE in Las Vegas. We must admit that we got a chuckle over their promotional offer to circumvent certain likely vendor "gift" policies to get folks to the event -- see the tweet below from late March: "Use Promo code TWTRCHP when you register for #AribaLIVE & get $250 #CaesarsPalace chips aribalive.com." The irony, of course, is that P2P done right (with Ariba or any other leading provider) is anything but gambling. But alas, perhaps it's more a reflection of our times that such an offer is more effective than larger discounts to the event or the more common "three for two" or "two for one"-type offers.
Back when we attended LIVE ourselves (we are 'unofficially' attending this year through various sources), we found the typical audience to represent a diverse procurement set, not the type to be swayed by a few extra chips. These included procurement executives, P2P managers and even some more category/sourcing-oriented folks (although the latter group we've heard are in decline, given Ariba's focus away from broader solutions and functional depth in the area post divesture of the old Free Markets business unit and a focus away from developing leading sourcing tools). In general, LIVE has rarely brought with it any momentous company or product strategy announcements, but what the executives opt to present and the language they use (e.g., the shift to "commerce cloud" a few years back) typically works its way into the rest of the organization's positioning shtick relatively quickly.
A couple weeks ago, someone wanted our general opinion on Ariba. At the time, we described to them our summary looking at Ariba as a "company of contradictions," where it's possible to interpret what they've recently accomplished in multiple ways. We could argue either side of the coin. For example, does Ariba's current business and revenue approach represent a brilliant and sustainable turnaround or a potentially harmful new supplier-funded model that could alienate certain folks in its community (potentially both buyers and suppliers)? Are they a leading P2P vendor (e.g., eProcurement, e-invoicing, network plumbing) or something more, a provider with competitive end-to-end suite capability inclusive of spend analysis, contract management, supplier management, sourcing, etc.? Do they sell applications to fuel network revenue or sell the network to lock in application users?
You can see how Ariba is very much a company of contradictions whose progress is open to interpretation based on what perspective an observer opts to take, unlike other vendors whose progress and direction is hard to misinterpret one way or another (whether you use or support them or not). Yet for the insiders in the market, it's hard to dispute where Ariba has focused in recent years, and that's continuing to drive strength in their core P2P offering.
For example, we still rank their eProcurement toolset as a top choice in our shortlist client analyses focused on functionality first for core indirect catalog procurement when we factor into account the following functional areas: supplier on-boarding, catalog management, supplier portal, workflow/process management, requisitioning/approvals, order management/visibility, supplier connectivity/network, invoicing/payment (basic) and invoicing/payment (advanced). However, outside of absolute capability, numerous competitors approaching the market from the eProcurement side of the equation and e-invoicing areas have taken different approaches and are gaining increasing market share.
Hence, across the board, even our analysis suggests Ariba is a vendor of contradictions. They're the best in certain things (or not) depending on how you measure and look at them. But one thing is certain: looking forward, we're likely to see an evolution of their strategy, provided they continue to remain independent, if they're to remain a contender in the market. Even within the eProcurement space, the pressure from the SAP ecosystem alone (software, BPO and SI partners included) is costing business every quarter. And that doesn't even consider the best-of-breed side of the market continuing to gain traction through leapfrogging not only the Ariba user experience but also incorporating broader categories of procurement spend into a single platform (which likely resulted in a recent patent suit we'll cover soon).
Most important, Ariba keeps delivering, one way or another. Still, we expect to see an evolution of their strategy to stay competitive in the market for some time to come. And that's because we believe Ariba's current architectural, solution and business model course is not sustainable -- from a momentum perspective -- given the actions of others in the market. After LIVE, we'll offer our take on the announcements (including some recent product enhancements) and where Ariba is likely to take its solution playbook in the coming years in an attempt to retain its position as the largest pure-play vendor in the procurement market. After all, long after this cloud commerce thing dissipates, we'll still have a market of procurement, AP and finance users needing core buying and vendor management capabilities along with suppliers needing to connect to customers. And that's something I'd bet my own chips on (paid for with my own account to avoid any conflicts of interest, mind you!)