Is Ariba Still On-Demand? For shareholders and execs the answer is yes but . . . (The Ariba Interviews Revisited)

Posted on September 13, 2012


Shortly after taking to the virtual airwaves of the Blog Talk Radio Network in the Spring of 2009, I had both the unique opportunity and pleasure of interviewing Ariba’s Chief Marketing Officer Tim Minahan as well as their CFO Ahmed Rubaie.

The shows, which originally aired on April 16th, 2009 (There’s a slow, slow train comin: Epilog for the Ariba Interviews – Tim Minahan) and May 7th, 2009 (Ariba: Calculating the Cost of Transformation – Ahmed Rubaie), focused on Ariba’s announcement that they were now officially an on-demand company.  Specifically that they had for all intent and purposes eschewed their traditional licensing model in favor of the on-demand or Software-as-a-Service “SaaS” model.

Looking back today, I could not help but wonder if the corporate DNA transformation to which Ahmed referred in discussing the challenges of adopting an on-demand business model have paid off for the company.

Certainly from a personal standpoint Ahmed has enjoyed prosperity.

According to public records, Ahmed sold a block of 10,000 shares on August 2nd, 2011 at a price of $30.96 per share totaling $309,600.00

Twenty days later (on August 22nd, 2011), he then sold another block of 20,866 shares at a price of $22.53 per share totaling $470,110.98.

Of course you would have be living on another planet or under a Geico rock to not know that back in May of this year SAP agreed to buy Ariba for $45 per share or $4.3 billion in total.  So based on the $45 per share purchase price, it appears that both Ahmed (who owns an estimated 233,424 worth $10,504,080), and Ariba are doing even better now.  Certainly better than I did when I sold my company for $12 million back in 2001 at the height of the dot com boom (but that is a story for another day).

But . . . is this a good deal for customers?

But does this financial success translate into customer success . . . and satisfaction?

When I broke the story in September 2010 that the OECM was giving Ariba the boot (OECM Punts Ariba, Taking a $20 Million Dollar Hit In The Process?), I asked this very same question.  Specifically, how do client failures or for that matter even successes (as rare as some claim they are) come into play in the calculation of the company’s share price performance?

Certainly Ariba’s decision to publish a book titled Collaborative Commerce for Dummies seems to suggest that the market just wasn’t getting it in terms of implementing an Ariba or Ariba-type solution.

Ironically, the disdain for the idea behind the book was one of the few instances when Jason Busch (Spend Matters) and I found ourselves in agreement.  The thought that a company would openly imply that their target customers don’t get it i.e. that they are Dummies, and then oversimplify the solution in a Coles Notes format was surprising.  I mean I get what they were trying to do but still?!  By the way, if you have a moment check out Jason’s Spend Matters blog.

So here is my question to you dear readers; Is the SAP acquisition of Ariba (which is expected to get the final regulatory approvals by the end of the year) going to translate into customer success?


Posted in: Commentary