ariba
TRANSCRIPT
www.ariba.com
What is ARIBA?
B2B E-Commerce A leading B2B E-procurement software
platform and software provider E-Procurement Net Marketplace
E-procurement Markets
Ariba’s E-Procurement Net Marketplace
ARIBA Product & Service
ARIBA Product & Service
Spend visibility Solution Ariba Analysis Ariba Data Enrichment Ariba Spend visibility
Sourcing Solution Ariba Sourcing Ariba Supplier Performance Management Ariba Category Management Ariba Sourcing On-Demand
ARIBA Product & Service
Contract management Ariba buyer application Ariba Category Procurement Ariba Travel and Expense Ariba Procure-To-Pay
Procurement and Expense Ariba Contract Workbench Ariba Contract Compliance Ariba Contract management
ARIBA Product & Service
Invoice and payment Ariba Invoice Presentment Payment
Supplier management Ariba Supplier Connectivity Ariba Supplier Network
Process Solution Benefit
Procurement Processes Automated and streamlined its procurement processes
Considerable time savings and a more than 60% reduction in costs of processing purchase requisitions
Supplier Consolidation Consolidated suppliers using Ariba buyer
Provided necessary information for renegotiation of volume discount agreements
SOLUTION EXAMPLE
ARIBA – Customer’s Industry
Automotive Banking Business Services
/Consulting CPG Cement Chemicals Computer Software &
Services Construction Education Energy High Tech
Construction Materials Distribution/Wholesale
Engineering, Scientific & CAD/CAM Software
Federal Government Finance/Accounting
Food, Beverage & Tobacco Health Care Services Transaction, Credit & Collections Technology Manufacturer/Developer
Leisure Manufacturing Media
Pharmaceutical Retail Telecommunication
s Consumer Products Transportation
ARIBA’s Vision
“To become the leading provider of Spend Management Solutions, which are Software and Service to help manage what they want”
Business Model
Originally Web-based Licensing and Maintenance Fee
For buyer Reduction in Procurement cost, Supply Cost, Error Faster acquisition cycle
For Supplier Reduction in selling cost Faster payment Access to purchasing power of large firm
Built Ariba Supplier Network Charge fee based on transaction value among trading
partner Cisco e-Procurement
Shift to Web-based On-Demand Software Solution
Subscription and maintenance Fee
Value Proposition
Spend Management Solution , it delivers; Speed Sustainability Coverage Flexibility
Strategic – Business Strategies Related-Business Acquisition
Alliente : A provider of business process outsourcing
FreeMarkets : One of the largest operator of independent Net Marketplace or Exchanges
Softface : Expertise in spending analysis, catalogs and contract management
Competitor Acquisition Procurri : Reach “Middle Market”
Strategic – Competition
Direct (Pure Web-based eProcurement) Emptoris Ketera Technologies Verticalnet Frictionless Commerce Commerce One
Large ERP company (Business Software Solution) SAP Oracle
Competitive advantage
Top challenges Actual & planned
users Suppliers enabled Transaction volume Spend under
management
Requisition-to-PO cycle cost
Requisition-to-PO cycle time
Provider satisfaction Software functionality
Reference © 2006 AberdeenGroup, Inc. Publish December 22, 2006
Strategic – Alliance
IBM and i2Technologies Develop solution for specific customer
EpylonTo develop an integrated platform specifically
designed to meet the needs of public sector procurement.
ClearCross To provide total landed cost calculation
services on the Ariba B2B Commerce Platform.
Strategic – Alliance
Business Process Outsourcing Partners
Reseller Partners
Strategic – Alliance
Consulting and Solution Provider Partners
Strategic – Alliance
Technology and Product Partners
Strategic – Technology
ARIBA cXML-PunchOut Allow a buyer to access a supplier's Web
site from within the buyer's own procurement application
For Example, Cisco ePurcurement to enable Cisco buyer to order Cisco products via buyer’s Ariba application
Strategic – Social and legal Challenges
Sued by Share Holder in FreeMarkets acquisition
Patent infringement ePlus inc. Vs Ariba
Ariba Buyer Ariba Marketplace Ariba Category Procurement
Sky Vs Ariba Emptoris Vs Ariba
Financial 2000-2010 stock price
Financial 2010 stock price
Financial Period Ending 30-Sep-09 30-Sep-08 30-Sep-07
Total Revenue 338,972 328,060 301,667
Cost of revenue 128,922 148,534 161,398
Gross Profit (A) 210,050 179,526 140,269
Operating Expense
R&D 43,483 52,270 51,159
Selling General & Administrative
139,501 159,753 133,684
Non Recurring 10,837 15,442 (17,758)
Other 755 739 525
Total Operating Expense (B) 194,576 228,204 167,610
Operating Income (A-B) 15,474 (48,678) (27,341)
Income from Continuing Operations
Total Other income/ Expense Net
- 8,359 14,301
Earning Before interest and Taxes
9,419 (40,319) (13,040)
Interest Expense - - -
Income before Tax 9,419 (40,319) (13,040)
Income Tax Expense 1,226 743 1,937
Net Income from continuing Ops
8193 (41,062) (14,977)
Net Income 8193 (41,062) (14,977)
Future Prospects
Expansion Consulting Service More acquisition Strong Competition from software firm
such as SAP and Oracle Acquisition target for larger technology
firm
Suggestion
Long Tail Expand in “Middle to Lower market” Software customization B2C to become personal management
Global Firm Support for all foreign currency Expand to Asia-Pacific supplier and buyer Cover all business industries