Ariba’s Transformation – read a brilliant analysis from Jason Busch

When I first read Spend Matters US, before my own blogging career began, I thought I’d stumbled on something pretty special. I’d never seen such a blend of deep understanding of procurement, particularly the technology side of things, with an opinionated but highly independent viewpoint.. and the guy could write as well! It was the start, as they say, of a beautiful relationship.

And almost three years later, Jason Busch still writes some pieces that just hit me with their great combination of insight, interest and style, I still want to tell everyone about  them. You may feel you’ve read quite enough about the SAP Ariba deal, but I’d urge you to take five minutes to read Jason’s post here from last Friday.

In “A Retrospective Essay – Looking Back on Ariba’s Transformation,  he explains the strategies that Ariba have followed over the last few years that have led them to being worth $4.4 billion, and gives a great description of the compromises and the (generally vindicated) decisions they made along the way. He looks at some of the rationale for the SAP move, and what it could do for customers, and ends up looking ahead with some of his hopes for the future of the new combined business.

All in all, it’s a highly informative and enjoyable read – I urge you to take a look.

Along the way, he also gives the first explanation I’ve seen anywhere of why the Ariba management and key investors might have decided that “now” is a good time to sell. To whet your appetite for the whole post, here’s an extract which covers that particular point..

Following the IBM/Emptoris deal, the time had come for Ariba to sell-out. In the eProcurement space, it was increasingly facing competition from folks like Coupa, which had flanked it on usability and a cloud-based operating model that enabled more rapid deployments, benchmarking and other benefits compared with the Ariba SaaS approach. Moreover, general saturation had begun to settle in certain market segments. What's clear from many sources we've spoken to off-the-record is that the timing of Ariba's exit given recent commercial activity trending and forward-looking opportunities could not have been better. Read into that as you may, but I sincerely believe that the exit timing to maximize valuation was an absolute coup.

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