Now the Dutch Dust Has Settled – Final Round-Up From SAP Ariba Live

Looking back at the SAP Ariba Live event – three weeks ago now - it’s worth pulling together some headlines and overall thoughts that give a flavour of where the firm is heading. We covered some of this in our daily highlights at the time (here and here), and Michael Lamoureux told you all about Snap (as well as Crackle and Pop) here and here!  But just to round-off our coverage, here are a few key points:

  1. Things are going well! The SAP first quarter results which came out during the event were “stonking”, as I believe the financial analysts say. The SAP Business Network segment, which the firm defines as SAP Ariba, Fieldglass, Concur and the HANA® platform, saw revenues increase 17% year on year to €663 million. That would be respectable growth for a small, up and coming firm, let alone for a market leader. And to get over 2000 people at the European event was really impressive.
  2. The partner network is strong, with the big consulting firms well-represented, as well as the implementation specialists such as Xoomworks, Excelerateds2p, Apsolut etc. The mid-market Snap offering gives partners another string to their bows too. But beyond the traditional implementation area, there are clear signs that SAP Ariba is opening up, perhaps most obviously in the risk and CSR area, where the firm is partnering with others who can bring risk data and information into the SAP Ariba platform. That ranges from the leading providers to niche players who report on modern slavery, for instance.
  3. The question of network fees hasn’t gone away by any means but with the Snap offering and other concessions, particularly for smaller firms and lighter users, SAP Ariba are surely looking to defuse what can be an emotional issue. Will fees ever disappear completely? Who knows – but their significance may well decline further (and SAP Ariba’s competition will certainly hope the fees don’t go completely!).
  4. The firm clearly wants to be at the forefront of technology, whether it is via the partnership with IBM leading to AI and machine learning being embedded in P2P, sourcing and more, to the early tools they demonstrated featuring virtual reality and voice control, for example. While it is not impossible that a start-up might come along and disrupt the whole procurement technology sector, we feel it is becoming less and less likely given the strength and focus on the future being shown by SAP Ariba (and, to be fair, by several of their biggest challengers too).
  5. SAP Ariba is clearly aware that other firms have sold against them on the “user friendliness” criterion and wants to address this. Initiatives such as “guided buying” are going down well with clients from what we hear, and the firm is working to address the perception that their option isn’t the easiest for users. Expect to see this focus continuing.
  6. We’re talking about Procurement with Purpose frequently at the moment, so we won’t go into too much detail again here (but do download our paper available now) – but it was a major theme in Amsterdam. Some are cynical about motives, but my take on it is SAP Ariba are being quite brave here to stick their collective head above the parapet. It comes down to whether senior management really believe in what they’re saying – and I think they do. You can also read Michael Lamoureux’s excellent articles on the topic on Spend Matters US here.

We could go on – the increasing focus on direct spend, the Manufacturing Network, more on supply chain risk (and risk appears to be very near the top of the “customer interest” chart at the moment), the prospect of sharing information between buyers on the Network … SAP Ariba certainly isn’t sitting back and admiring the view from the top of the market.

Indeed, the growth of competitors, particularly Coupa, but also the external funding that others such as Jaggaer and Tradeshift have received, which indicates their potential, all seems to have spurred on SAP Ariba in the past year or two. Which is of course good news for all users of procurement technology – a vibrant and competitive market can only be a huge positive.

 

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