By Nick Patience
Ariba Technologies Inc moved last week to counter claims made recently by rival Intelysis that it is playing catch-up in the business-to-business portal or operational resource management (ORM) space (03/08/99). On the contrary, says Ariba, it is about twice the size of Intelysis and has closed more deals in the past two weeks than Intelysis has in its existence, says VP marketing David Rome, including a recent software deal worth $10m. Ariba’s software links buyers and sellers of business products and services via extranets. Intelysis’ business-to- business commerce service will not be available until June.
It would not come as a major surprise if San Jose-based Ariba announced its initial public offering in the very near future, although the company declined to comment. Ariba recently launched its Ariba.com network, a web-based service to connect buyers to suppliers. The buyers pay for the Ariba software, while the suppliers register at the site for free and specify what web server they use and in which format they want documents sent to and from them and the buyer. Cisco Systems Inc will be using the system as a pilot by early April and Ariba expects to launch it worldwide in June.
In addition to the myriad of smaller companies, such as Aspect and Harbinger that are populating the ORM space, Rome reckons its main rivals at the moment are ERP vendors such as SAP and Oracle – although Oracle is the only one of those that has its product up and running.
The recent deal with Hewlett-Packard Co saw HP buying the Ariba software for its procurement as well as Ariba choosing HP as its supplier of data center outsourcing services worldwide. Ariba prices its software based on the size of the entity, with the measure being the number of orders the company processes each year. There is an annual maintenance fee on top. Rome says none of its software deals are worth less than $500,000. Ariba does the support the nascent Open Buying on the Internet (OBI) protocol, but Rome doesn’t believe it will succeed in the long term as it is too complex, being an internet-enabled version of EDI. Ariba has raised a total of $25m in VC money, but has been cash flow positive for the past half-year or so. Rome declined to disclose the company’s run rate.
