SAP’s Ariba buy is cloud talent grab – analyst

German applications giant SAP yesterday announced its intention to acquire Ariba, a US-based spend management software-as-a-service provider, for $4.3 billion.

Ariba operates a cloud-based business commerce network, that integrates with its customer ERP applications and connects them to suppliers and partners. This network saw 62% growth in 2011, helping Ariba push revenues up 39% to $444 million.

But according to Carter Lusher, chief analyst at Ovum, SAP is buying the company to extend its cloud expertise.

"“This acquisition is less about Ariba’s global trading network than a “talent grab” about the business issues of cloud computing and technical insights on developing applications for the cloud," Lusher wrote in a research note today.

He said there were other drivers too, including acquiring customers and moving into new markets. "This is a logical step for SAP as it needs to accelerate its move into the cloud," Lusher wrote.
Last week, an internal SAP memo from Lars Dalgaard – former CEO of Successfactors, the cloud HR software vendor SAP acquired last year – was leaked, revealing his thoughts on the company needs to do to succeed in the cloud.

"We need less products, and focus more of our great people, from development to sales and customer support, on fewer products that can compete now, and sell now," Dalgaard wrote. "We need to do to make SAP credible, then we can become relevant, and competitive in the cloud."

The memo reveals that SAP consider cloud HR and finance software provider Workday to be its number one competitor in the cloud, with as number two.

It even mentions Ariba as a "secondary competitor". 

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Ben Rossi

Ben was Vitesse Media's editorial director, leading content creation and editorial strategy across all Vitesse products, including its market-leading B2B and consumer magazines, websites, research and...

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