Ariba: Survivor StoryBy Baselinemag | Posted 2004-08-01 Print
Ariba survived the high-flying Internet years, but it now risks losing business to the big boys.
Ariba has shored up its tech support and improved the quality of its software, says Carter Cherry, assistant vice president of corporate procurement at insurance provider St. Paul Travelers. "They're growing from a startup to a full-fledged software company," he says. The company fixed some of its early problems, Cherry says, including "very weak" technical support: "Our technical folks used to not call them because it was a waste of time."
Simply being a dot-com survivor, however, won't ensure its continued existence, and Ariba is now at risk of losing business to the likes of SAP and PeopleSoft. For example, when specialty chemical supplier Rohm and Haas rolled out Ariba Buyer in 2000, it was running multiple existing enterprise resource planning systems. Since then, Rohm and Haas has standardized on SAP's ERP software worldwide. "We have four years of experience with Ariba, and our users are comfortable with the tool," says Cindy Passamonti, global e-procurement process manager. "But SAP's suite has matured in the intervening time, so we're going to go back and take a look at what they have."
Meanwhile, Ariba's past shortcomings still irk some customers. At Purdue University, more than 16,000 faculty and staff members buy everything from lab beakers to pencils through Ariba Buyer. Larry Pherson, Purdue's director of purchasing services, says Version 7 of the software gets bogged down if it's swamped with large queries. "It's possible to really screw up the responsiveness of the system," he says. The performance degradation "is noticeable, especially if you're working in the system for significant portions of the day."
Pherson and his staff are gearing up to upgrade to Version 8, which he expects to help alleviate the slowdowns. "I'm generally satisfied with Ariba," he says, "but not ecstatic."
Ariba Operating Results*
* Fiscal year ends Sept. 30; FYTD reflects first nine months; Results include special charges of $113M for 2003FY and $559M for 2002FY
Total assets - $471.55M
Stockholders' equity - $219.98M
Cash and equivalents - $123.85M
Long-term debt - None
Shares outstanding - 45.45M
Market value as of 7/27 - $404.85M
** As of june 30, 2004, except as noted
Includes short-term investments
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