Spend Matters PRO Week: Ariba/SAP Customer Recommendations and Initial Analysis (Part 1)

To highlight the depth of what's available on Spend Matters PRO, we'll be featuring full text analysis from select research briefs this week on the Spend Matters public site. Spend Matters PRO is our response to the type of material we wanted (but never got) when we were customers of industry analyst research firms. It's fast, deep, pragmatic, and insightful.

We're offering a special discount to the first 25 yearly subscribers we sign up this week (individual seat costs in this offer are creditable on a pro-rotated basis to corporate/all company access accounts should you decide that you want to share in the insight with your peers). Drop us a line (smoore (at) spendmatters (dot) com) if you want to take advantage of this opportunity!

Below, we feature excerpts from Part 1 of our analysis from October 1st offering customer specific recommendations for those impacted by the closing of the Ariba/SAP transaction. For subscribers, access the original here: PRO Analysis: DOJ and UK Fair Trading Office Clear SAP Acquisition of Ariba:

Over the weekend, the US department of Justice (DOJ) cleared SAP's announced acquisition of Ariba, a move that represents the last major hurdle that SAP had to overcome to close the deal. This follows news from earlier last week that the U.K. Office of Fair Trading also approved SAP's announced acquisition of Ariba. The DOJ clearance was something we predicted on Spend Matters PRO (and Spend Matters), but the announcement was by no means certain...[continued on Spend Matters PRO].

Based on our analysis of product and network marketshare and competitive positioning of overlapping products between SAP and Ariba, we never doubted the deal should clear. Yet the fact the DOJ had to consume likely close to eight figures of private sector dollars on lawyers and consultants as part of a second request efforts represents a giant drain on shareholder value and the private sector. But despite the closing delay and cost to shareholders, the deal is now all but done. According to a joint press release issued by both SAP and Ariba, "SAP said that all of the required regulatory approvals for the transaction have now been received ... [and] SAP and Ariba anticipate completing the acquisition in the first week of October 2012."

We'll be covering our analysis of what's next for Ariba and SAP in detail on Spend Matters PRO – including expected planning around customer communication, product planning, product integration and new product development (e.g., mashup of SAP's Supplier InfoNet with Ariba network) – in the coming weeks after we talk to SAP and Ariba in more detail. But at this stage, we feel comfortable making a number of observations and initial recommendations:

  • Business as usual. Ariba customers without an SAP back-end should plan for business as usual during renewals in the next 6-12 months. Spend Matters believes that Ariba will continue to support its current solutions for at least the next three years – potentially longer – before the potential release of more SAP-centric procurement and network solutions built on their more modern stack, UI frameworks and next generation in-memory database (HANA)
  • Look to current solutions and existing roadmaps. Customers with both systems (or subscriptions) should continue to evaluate upgrades and additional modules based not on longer-term roadmaps, but current availability of solutions (and planned solutions for the next two quarters)
  • Waste no time in evaluating and benchmarking alternatives. All Ariba and SAP customers should use the quarter following deal close to benchmark the current capabilities of their solutions compared with others in the market (from feature, integration, flexibility, price and enabling service perspectives). It's likely that many competitors will offer very favorable terms to switch to competing products during this transition period

To be continued.

Interested in this level of commentary and analysis everyday? Take advantage of our special discount to the first 25 yearly Spend Matters PRO subscribers we sign up this week. Email (smoore (at) spendmatters (dot) com) for more info.

- Jason Busch

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First Voice

  1. Can't Say:

    I would also add into the feature, integration, flexibility, price and enabling service perspectives, the TCO costs for acquiring or staying with the SAP Ariba model. SAP plans to commoditize outside the firewall via the Ariba Network. This means SAP wants to extend its reach into the cloud but also profit from it via the rich supplier fee revenue streams. Quadrem had worked this out and I’m as sure as certain the Ariba model of charging of suppliers on the PO face value a transaction fee will end up hooked up to SAP SRM 7 and the Ariba network eventually.

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