New Forrester report suggests IBM finally got it right in buying Emptoris – I wonder if anyone remembers the IBM Ariba adventure? by Jon Hansen

Posted on March 7, 2013


I recently found myself contemplating and writing about life as a parent when one passes the half century mark.  Just to be clear right out of the gate, and to avoid a restless night on the family couch, my partner Jennifer is nowhere near 50.

This last point clarified, the age factor does come into play when you have children.  For example, I am oftentimes  asked if television had just been invented when I was young.  Given the suggested ramifications of answering this question, I don’t even bother broaching the subject of black and white TV, for fear that it will lead to uncomfortable questions surrounding the discovery of fire and if I enjoyed riding a horse and buggy.

All this being said there are of course many benefits for longevity.  One that came to mind most recently was when I had heard that a Forrester Report “Rates IBM Procurement Solution as a Leader.”

News of this honor which notes “IBM Emptoris’ substantial capabilities in strategic sourcing,” prompted a seniors moment of a favorable kind.

To start, and based on my extensive coverage of the company, I have always been a fan of Emptoris. The reason for my enthusiasm is due to a number of factors including what I referred to in a May 15th, 2009 post as the company’s corporate DNA expansion.  By the way, here is the link to that article; Commentary: Emptoris’ Acquisition of Click Commerce a Question of DNA Expansion versus Evolution.  Specifically, I was impressed with the fact that with the Click Commerce transaction Emptoris was able to “successfully maintain the balance of its indigenous innovative insights (or DNA) with an increased breadth of service offering to expand its ability to better serve a growing, mainstream market.”

This was a vastly different framework for change than what occurred with Ariba.  If you recall, around the same time that Emptoris was increasing its breadth of service with Click Commerce, Ariba made its evolutionary announcement that it was now an on-demand company.  However and unlike Emptoris, in making the move to becoming an on-demand company, Ariba CFO Ahmed Rubaie told me that “The biggest challenge in transitioning to an on-demand model is not really financial per say, nor is it about the technology investment.  It’s really about changing the DNA of the company.”  Think of what Rubaie said in the context of building an addition to an existing home as opposed to tearing down the old home to put up a new one.  With Emptoris we are talking addition, while with Ariba well, you get my drift.

Not everyone at the time agreed with my take on these industry developments.  Spend Matters’ Jason Busch for example questioned my business IQ and warned me that I was quickly becoming the “Fenimore Cooper of procurement blogs.”  You can read Jason’s entire commentary – as well as my response – through the following link; Achieving Practical Outcomes to Complex Purchases at the Heart of the Emptoris Acquisition of Click Commerce.

Jason’s admonishment notwithstanding, my position didn’t change.  Emptoris I believed was an up and coming player who was naturally progressing into a leadership position, while Ariba was Ariba, a different dog with the same fleas.

Ultimately the veracity of my position proved itself when IBM acquired Emptoris in late 2011.  All in all a happy ending on route to a new and promising beginning.  Which brings us back to yesterday’s announcement by Forrester.

Now one might be inclined to end the story here and roll the credits but . . . like a surprise ending to an Alfred Hitchcock movie there is always an interesting to be continued sub-plot.

In the case of the IBM – Emptoris story, there is the Ariba connection lurking in the shadows.

Let’s go back in time, way back to 2000.

IBM Ariba July 2000

You see, long before IBM’s rendezvous with Emptoris, there was a marriage of sorts between Big Blue and Ariba.  That’s right, the proverbial skeleton in the eProcurement world closet.

As the following July 25th, 2000 article – IBM, Ariba unveil software package for suppliers – will attest, big things were being predicted for the IBM – Ariba union back then.  Of course and like most Ariba driven initiatives, such optimism proved to be long on promise but short on delivery.

Despite Forrester’s Andrew Bartels December 15th, 2011 blog post assertion that he would have thought that “IBM would buy Ariba, because of the long relationship that has existed between the companies,” I would hazard a guess that many at Big Blue are probably thankful that they dodged the proverbial bullet by going instead with Emptoris.

So where does this leave Ariba.

Don’t worry readers.  Even though Ariba might be the unattractive poor cousin, a suitable suitor emerged in the form of SAP.  However, if you want to find out whether or not that particular union will be successful, you will have to ask Danny DeVito (Danny DeVito Comments on The SAP Acquisition of Ariba for $4.5 Billion . . . Well Sort Of . . .).


Posted in: Commentary