Business & Technology Nexus

Dave Stephens on technology and business trends

Ariba Quarterly Report

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Jason Busch over at spendmatters has the objective analysis. Here is where you’ll find the rant… Btw, the 2nd comment on jason’s blog by ‘Dan’ is pretty insightful too.

I was stumped by Ariba’s quarterly numbers. They are certainly out of excuses for not growing the top line. I’ve definitely heard enough of how great the transition to SaaS is going while revenues limp along. Oracle, SAP, and many of the little guys in Procurement are growing license (let alone total revenue) at an impressive clip in Procurement – and yet the self-proclaimed leader is shrinking.

But I shouldn’t have been surprised. The problem is straightforward imho. Ariba saturated the Fortune500 with hugely expensive software back in the .com boom. These big firms were stuck with massive annual support bills, and over the years they’ve switched off Ariba and onto something else – and justified the migration on the reduction in support payments alone.

Ariba isn’t accumulating any at-risk contracts like that anymore, but it’s just taking a long time for the overhang to work itself off.

Now this Ariba view is sans-FreeMarkets, which was struggling with it’s own “renewals” problem. I remember thinking they sold to Ariba at just the right time – before their revenues began sagging as buying organizations opted for more self-service.

So I am awaiting some stronger numbers from Ariba – they certainly have a great vision and some really useful technology for customers. Maybe next quarter.

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Written by Dave Stephens

04/27/06 8:34 PM at 8:34 pm

Posted in Opinion

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