This as well<thanks to Fallope>
Ariba Expands Reach In
Manufacturing Market
(02/28/01, 7:18 p.m. ET) By Antone Gonsalves, TechWeb News
Ariba Inc. is teaming up with Syncra Systems Inc. to
push further into the business of supplying software for
purchasing materials online—a market that takes Ariba
into direct competition with longtime partner i2
Technologies Inc.
In addition, Ariba (stock: ARBA) said it has also
entered partnerships with Zeborg Inc. and
SeeCommerce, combining the first company's analytical
software with Ariba's e-procurement application and
reselling the latter's supply chain management software.
Albert Pang, analyst for IDC, Framingham, Mass., said
the Syncra deal places Ariba squarely in competition
with i2 (stock: ITWO) and other companies selling
software that helps manufacturers streamline the
process of buying materials.
"There's no question that this is going to present a direct
assault on some of the supply chain management
vendors out there," including i2, Manugistics Inc., and
Oracle Corp. (stock: ORCL), Pang said
Scott Barnum, analyst for ABN Amro, Amsterdam,
Netherlands, said the deal puts "one more nail in the
coffin" of the Ariba-i2 partnership.
"Syncra does compete with i2," Barnum said.
Martin Boyd, director of Ariba marketplace solutions,
played down the implications of the arrangement with
Syncra, Waltham, Mass., saying Ariba and i2 have
always agreed to partner on customers who need
applications from both vendors and compete for others.
"If we're better together, then we will go [into
customers] together," Boyd said. "If not, then we will
compete on our own merits."
Officials with i2, Dallas, declined comment.
Ariba will sell Syncra software, which allows
manufacturers to share information that helps manage
inventory with suppliers. The goal is to shrink the
number of times companies experience excess inventory
or inventory shortages.
Ariba, which started its business selling Internet-based
procurement software for general office goods, said the
Syncra agreement will initially target high-tech,
aerospace, consumer goods, retail, and automotive
companies.
The reselling agreement complements Ariba's
announcement last month that it would acquire Agile
Software Corp. (stock: AGIL) in a $2.55 billion stock
swap. The transaction is expected to close in the third
quarter.
Agile competes in a space called collaborative product
commerce, or CPC, which refers to a set of tools that
lets companies manage the information surrounding a
product.
It also lets them share that information via the Internet
with other parties, mainly suppliers.
The Agile deal was Ariba's first major move against i2,
the No. 1 supply-chain vendor. The two companies
joined IBM Corp. (stock: IBM) nearly a year ago in
forming a triumvirate that built e-marketplaces.
Among the larger agreements won by the partnership
were e2open.com, a giant electronics component
exchange, and Worldwideretailexchange.com, one of
the largest Internet marketplaces.
In the other moves, Ariba will resell SeeCommerce's
software that allows business managers to monitor the
performance of their online supply chain and generate
quality control and other reports. SeeCommerce is
headquartered in Palo Alto, Calif.
With Zeborg, New York, Ariba will resell its
ExpenseMap software in conjunction with Ariba Buyer.
ExpenseMap analyzes corporate spending for general
office supplies to help ensure optimum value.
Reflecting a lessening of expectations for software
companies during the current economic slowdown,
Goldman Sachs and Banc of America Securities
lowered their 2001 sales and earnings estimates for
Ariba and other vendors.
Banc of America cut Ariba's license and network
services sales for fiscal 2001 and 2002 by 2 percent to
3 percent and 9 percent, respectively. Its 12-month
price target on the stock went from $70 a share to $40.
Goldman Sachs cut Ariba's revenue and profit estimates
for fiscal 2002 by $133 million and 5 cents a share.
Boyd declined comment on the Wall Street cuts, but
said customer interest in Ariba software had not waned
because of the hefty savings companies experienced by
building more efficient electronic supply chains.
"The customers that we're speaking to believe that their
best path to continued strength is in implementing these
types of applications," Boyd said. |
