InformationWeek.com

Welcome Guest. | Log In| Register | Membership Benefits

March 5, 2001

Beyond Procurement: Ariba Aims At Private Exchanges

Vendor's Value-Chain Management Suite Faces Competition From I2, Oracle, And SAP

By Alorie Gilbert (agilbert@cmp.com)

More on Ariba:

TechWeb: Ariba Reaches Out To Small, Mid-Size Suppliers

TechWeb: Ariba Beats Street, Raises Forecast

TechWeb: IBM/Ariba/i2 Alliance In Question

an Ariba Inc., a leading vendor of E-procurement and E-marketplace technology, become a major provider of software to help manufacturers and suppliers coordinate product designs, orders, and inventories online? It has to--its stock price has been battered, and public E-marketplaces are failing by the dozens. But competition will be fierce.

Ariba is counting on the recent trend by companies to develop private exchanges to drive adoption of the value-chain-management software suite it plans to release in bits and pieces this year. Among the suite's components are Ariba Buyer 8.0, a new release of the company's flagship online requisitioning application that's due by year's end, and Ariba Sourcing 3.0, an update of its request-for-quote and auction software due by the third quarter. Key to both products is support for direct materials procurement.

The company also plans to release by year's end a built-from-scratch design-collaboration tool to let manufacturers and their suppliers share computer-aided-design files online. A manufacturing order-management system that Ariba gains in the acquisition of Agile Software Inc., expected to be final by May, is another major component.

It's uncertain whether enough companies will want to move in the direction of private exchanges to sustain that market. After all, public exchanges haven't gained the traction they were expected to. "This isn't an area that's written in a book," says Keith Krach, Ariba's chairman and CEO. "You learn as you go."

A new alliance with Syncra Systems Inc. to resell its supply-chain software will help Ariba round out its offerings. Ariba says its current partnership with Syncra competitor i2 Technologies Inc. will continue for public E-marketplace deals "when it makes sense." But it won't engage in co-marketing and reselling efforts with i2 in what it hopes will be the more-lucrative private exchange space.

Neither i2, Oracle, nor SAP and its partner Commerce One is about to cede the emerging market to Ariba, and Ariba has its work cut out gluing the pieces of its suite together. "The vision sounds great," says Eric Upin, a Robertson Stephens equities analyst. But, he adds, everything hinges on Ariba's execution.--Alorie Gilbert