Beware “Analyst” Research: Ovum’s Review of the Ariba Network


There are industry analysts and there are paid mouthpieces.

Unfortunately, many are increasingly falling into the latter category. And as Ariba has begun to share top marks with Coupa or fall behind in the traditional analyst rankings by Forrester and Gartner, it has increasingly ramped up its efforts with the latter group.

While I have no idea about the economics of this review by Ovum, which I read in researching some recent posts on the Ariba network and trade financing, what was missing in this report screamed out at me as much as what it included.

Having read this piece closely, it’s pretty clear Ovum only partially did its homework on the Ariba network. Not only is Ovum potentially misleading in calling out Ariba as the “largest B2B network by transaction volume and value” – Basware’s numbers look quite similar for 2014 and early 2015 and GXS/OpenText is materially larger for direct spend – the firm decided to list 4 “strengths” of the network and only 1 weakness. And honestly, the weakness is a joke – relative to how network customers and prospects today view Ariba today.

What is the 1 weakness Ovum points out, you ask? It’s China. Specifically, Ariba is not big enough in China. To wit, “Ariba is less established in China than outside as a B2B network provider. As the center of commercial gravity shifts increasingly east towards China, Ariba must take advantage of SAP's strong relationship links and localization experience in China to increase its footprint there.”

If I may add some MSG to the actual weakness category to bring out some other flavors, the elephant in the room – which Ovum would have gotten from talking to customers – is Ariba’s network fee structure. The supplier-paid fee structure disproportionately levies a “tax” on suppliers compared with competitive offerings delivering a similar service for transactional connectivity, according to many purchase-to-pay (P2P) customers and suppliers we have spoken with.

Further, if we want to add 2 others weaknesses to the list to equal out for strengths listed, we might also suggest network architecture, which is hindering Ariba from building out a platform-as-a-service model in its current state, and the current network support for global tax, regulatory and statutory e-invoicing requirements, especially in Latin America on the supplier side and developing markets like India, both intra- and inter-country.

Now don’t get me wrong. Ariba has a competitive network offering today on a functional level – and we get asked about it every day. On a rack and stack basis, it typically performs well. Even with direct spend support, Ariba is getting more serious, if an organization can get past the network fee model. Still, Ariba mandates the network for P2P users today – this limits customer choice. Comparatively, Taulia, Basware, Tradeshift, Tungsten, Coupa, Oracle, SAP SRM, Verian, GEP, Ivalua and many other e-invoicing and P2P providers all provide connectivity flexibility or network roaming approaches tied into applications.

In short: Ovum’s “SWOT” analysis of the Ariba Network emphasizes the “S” and shortcuts the “W” and “T.”

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