SAP Ariba
| Company type | Subsidiary |
|---|---|
| Industry | Software, IT services |
| Founded | 1996 |
| Founder | Bobby Lent, Boris Putanec, Paul Touw, Rob Desantis, Ed Kinsey, Paul Hegarty, Keith Krach |
| Headquarters | Palo Alto , United States |
Area served | Worldwide |
Key people | Keith Krach (former CEO) |
| Products | Cloud-based procurement platforms, SAP Ariba On Demand Suite of Applications |
| Parent | SAP SE |
SAP Ariba is a U.S.-based company specializing in software and IT services, with its headquarters located in Palo Alto, California. In 2012, it was acquired by the German software conglomerate SAP SE for $4.3 billion. SAP Ariba focuses on delivering cloud-based procurement platforms and facilitating business commerce networks.
Company beginnings
Established in 1996 by Bobby Lent, Boris Putanec, Paul Touw, Rob Desantis, Ed Kinsey, Paul Hegarty, and Keith Krach, Ariba set out to revolutionize traditional paper procurement processes for major corporations by leveraging Internet technology. The brand name "Ariba" was developed by a marketing agency to ensure simplicity and ease of recall; prior to launch, the company was known as Procuresoft.
Led by CEO Keith Krach, Ariba became publicly traded in 1999, marking it as one of the earliest business-to-business Internet firms to complete an initial public offering. On its debut trading day, the stock price more than tripled, valuing the company at $4 billion. By the year 2000, Ariba's market value had surged to nearly $40 billion. Nevertheless, after the collapse of the dot-com bubble, its share price plummeted in 2001 and lingered around initial public offering levels until it was eventually acquired.
Past acquisitions
On December 17, 1999, Ariba revealed plans to acquire Tradex Technologies, a firm based in Atlanta specializing in Digital Marketplace Software, through a stock exchange deal valued at $1.86 billion. This acquisition significantly increased Ariba's market presence. Following the announcement, Ariba's stock climbed from $57 to $173 by the time the transaction finalized on March 9, 2000, reflecting strong investor optimism during the height of the Internet Bubble. The issuance of 33.2 million shares to Tradex shareholders represented a value of $5.6 billion at that time.
In January 2001, Ariba intended to purchase Agile Software for $2.55 billion via stock swap; however, due to underwhelming financial results and staff layoffs at Agile, the agreement was terminated by April 2001.
In early 2004, Ariba expanded its sourcing software portfolio by acquiring FreeMarkets for $493 million. Subsequently, in 2007, it enhanced its customer base and on-demand services through the acquisition of Procuri for $93 million.
In November 2010, Ariba announced it would acquire Quadrem—a private company operating one of the largest global supply networks and providing on-demand supply chain management solutions—with the deal closing in January 2011.
By October 2011, Ariba had acquired b-process, a French electronic invoicing service leader, for roughly €35 million in cash.
In April 2013, Ariba formed a partnership with Medassets to broaden supply chain management and outsourced procurement capabilities, further enriching its product offerings and expanding market coverage.
Controversies
In December 2008, the U.S. District Court for the Eastern District of Texas issued an injunction against Emptoris for violating two of Ariba’s patents concerning overtime and bid ceiling mechanisms within reverse auctions. On December 16, 2008, Emptoris was ordered to pay $1.4 million in enhanced damages for willful infringement on top of a previous jury award of $5 million—totaling approximately $6.4 million—an amount notable relative to Emptoris’ reported revenue of $50 million in 2008. To resolve the issue, Emptoris deployed a software update addressing the infringement concerns; this solution was accepted by the court in February 2009, effectively closing the matter.
Ariba Product Suite
SAP Ariba now exclusively provides its cloud-based offering known as the SAP Ariba On Demand Suite of Applications. Clients currently utilizing on-premises software are anticipated to transition to this cloud platform, underscoring the company's strategic emphasis on cloud technology.
Acquisition by SAP
On May 22, 2012, the German software corporation SAP SE revealed its intention to purchase Ariba for around $4.3 billion, valuing shares at $45 each. SAP was advised by JPMorgan Chase and Deutsche Bank AG, while Morgan Stanley acted on behalf of Ariba. The acquisition received shareholder approval on August 29, 2012, and was finalized on October 1, 2012, with a total value of $4.4 billion. This move broadened SAP’s cloud portfolio and reinforced its leadership in procurement software.
Customer Base
By June 2022, the "SAP B2B Network" supported by SAP Ariba encompassed more than 5.3 million companies, facilitating transactions totaling $3.75 trillion annually.
Partnerships
In January 2022, SAP Ariba entered into a strategic alliance with Icertis, a leader in contract lifecycle management (CLM), acquiring a minority equity stake and committing to collaborative development initiatives.
See also
- Fieldglass
- SAP Concur