Ariba: Trying to Rekindle That Lovin' Feeling With CD Customers (Part 1)

In the rush to cash in on cloud hype, Ariba left many of its CD (now just "on-premise") customers out in the cold for a number of years, feeling as if they were second-class enterprise software citizens. Yet times are changing for Ariba (and its customer base) when it comes to embracing the old Buyer community. Indeed, Ariba is trying to rekindle that lovin' feeling with CD customers. And by all early indications we've seen, they're succeeding. Here at Spend Matters, we've spoken with a number of Ariba CD customers, a number of whom we've known for many years, and some who have done a near 180-degree reversal in their view of Ariba in the past six months based on the vendor's recent embrace and outreach. There are hints of this new-found olive branch on a post over on the Ariba Exchange.

The above-linked commentary notes that in embracing the CD community, "First, we have defined a 100-day plan during which my team will be reaching out to you in person, through email updates, and over Ariba Exchange. We would like to hear your specific concerns and address them. We also want to give you a forum in which you can communicate with your peers to discuss topics of mutual interest." Now, words are just words (Ariba once told its consulting partners that bringing services revenue in-house would not impact partner relationships). But our own intelligence and research suggests that Ariba is 100% serious about rekindling its relationship with the CD community.

This rekindling comes with some caveats, however, designed to make the CD model more Wall Street friendly, given the company's overall position as a cloud vendor rather than an enterprise software provider. For one, existing CD customers may upgrade to new versions of software they've previously purchased by buying a perpetual license with maintenance and support. But if they opt to license an additional module in an installed deployment scenario, they end up paying what amounts to a yearly license fee over a multi-year term, without any perpetual rights to using the application, even if they have it behind their firewall. Still, despite this model for licensing new modules, some of the CD customers we've spoken with are thrilled that Ariba has reengaged with them.

Stay tuned as we share some anecdotes in Part 2 of this post. Ariba's valuation may be stuck in -- and owing to -- the cloud, but when it comes to software, this is one vendor that looks to be serious about revisiting its enterprise roots to keep serving a long-installed customer base.

Jason Busch

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