Can Ariba Get Its Groove Back? - InformationWeek
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3/1/2001
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Can Ariba Get Its Groove Back?

Hoping to revive its name on Wall Street, Ariba tried Wednesday to shed its image as an E-procurement company. Ariba execs said they're releasing new products this year to help manufacturers and suppliers coordinate engineering designs and inventories online. The company unveiled its product strategy to analysts in New York, saying there's more to E-commerce than buying and selling office supplies. "Our expertise isn't procurement," said Larry Mueller, chief operating officer of Ariba. "It's mapping business processes to a networked business community."

The company plans to release Ariba Buyer 8.0, which will support direct material procurement and sourcing, by year's end. The company also plans to offer a new application that lets manufacturers work with their suppliers on computer-aided-design files online. That application is a prototype today, and the company plans to release it by year's end. Ariba plans to integrate these new components with a manufacturing order-management system that it's buying from Agile Software.

Ariba also announced a slew of new alliances. Most notably, it has agreed to resell supply-chain software from Syncra Systems, which lets companies share production plans and inventory data online. Syncra competes with i2 Technologies, but Ariba insists it will continue to partner with i2 "when it makes sense." But with Ariba encroaching on i2's space, that may not be very frequently. Keith Krach, CEO of Ariba, says it will work with i2 on public E-marketplaces such as Transora and e2Open, but will not take i2 into private marketplace deals, which he expects to be a much bigger market.

Ariba has set itself against much larger rivals such as the SAP-Commerce One alliance, Oracle, and i2 Technologies, which have announced similar strategies. Though Ariba claims it has a first-mover advantage, analysts say no one has a clear lead yet. One analyst says Ariba's biggest challenge will be to grab turf from its competitors that are already well-entrenched in Ariba's customer base. The challenge is even greater, given that many of the products discussed Wednesday are still under development and won't be available until later this year. "People would rather see tangible products and customers than vision," says Gavin Mlinar, an equities analyst at Sands Brothers & Co.

It was a bad day to try wooing Wall Street, however. The NASDAQ plunged 55.99 points Wednesday, dragging Ariba's shares to a new low of $16.50.

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