SAP Acquiring Ariba for $4.3 Billion

SAP's acquisition could boost its cloud-based collaboration and analytics capabilities.

SAP will purchase cloud-networking vendor Ariba for roughly $4.3 billion, a move widely seen as giving SAP additional muscle with regard to business-cloud offerings.

“These are not inexpensive moves but it signals they are really tilting more toward the cloud,” Kirk Materne, an analyst with Evercore, told Reuters May 23.

SAP believes the acquisition will allow it to bake cloud-based collaboration into its current products. Ariba’s network connects thousands of companies, and enables and automates billions of dollars in commerce transactions and collaborations. SAP will deploy its data-analytics applications in conjunction with the Ariba network’s relationship and transaction information, allowing trading partners to gain more real-time insights into their interactions.

SAP customers will also have the ability to access the network via “pre-built integration points,” presumably through SAP product dashboards. Following the acquisition, the Ariba network will supposedly leverage SAP HANA in-memory database for improved performance, although SAP left details of that vague.

The announcement comes days after SAP revealed an accelerated cloud strategy, centered in large part on multitenant cloud solutions targeted at a number of areas, including customer and supplier management. With more businesses than ever gravitating toward the cloud, SAP needs to develop platforms that meet the needs of that growing market: hence the Ariba acquisition, which in many ways echoes SAP’s $5.8 billion acquisition of Sybase in 2010—the latter a move designed to accelerate the company’s entrance into the business-mobility segment.

At the same time, SAP is emphasizing the latest evolutions of its business-intelligence software. At last week’s Sapphire Now conference in Orlando, Fla., the company highlighted offerings such as the SAP Visual Intelligence platform, which offers the ability to pull multiple streams of data from across an organization and plot those streams visually.

Research firm Gartner recently named SAP the top B.I., analytics and performance-management (PM) software vendor in 2011, with 23.6 percent market-share based on revenue. Oracle came in second, with 15.6 percent, followed by SAS Institute with 12.6 percent, IBM with 12.1 percent, Microsoft with 8.7 percent, and “Other Vendors” with 27.5 percent.

While that seems like a formidable lead over its competitors, the reality is that places can shift in relatively quick order, especially if one company scores a major acquisition that radically alters its product lineup and customer base. For example, Oracle announced May 23 that it would acquire Vitrue, a cloud-based social marketing and engagement platform—a deal that, in turn, will spark a reaction from the other players in the space. And so the game continues on.

 

Image: Centurion Studio/Shutterstock.com

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