LOL!! Ariba CEO Says B2B Hype Over, Focuses on Long Term
By Siobhan Kennedy NEW YORK (Reuters) - The new CEO of Ariba Inc. (NasdaqNM:ARBA - news), said on Tuesday it was time for the business-to-business software company to put the early, heady days of B2B e-commerce behind it and focus on the long-term.
``We must reset our expectations as well as our thinking,'' Ariba Chief Executive Larry Mueller told an audience during his keynote speech at the Ariba LIVE 2001 user conference in Las Vegas, which kicked off on Tuesday.
Mueller, who was named CEO on Monday, said the days of B2B aerobics, ``Where we move the numbers up and to the right, up and to the right,'' were over.
``Many of us bought into this over the past two years ... and in tech, where the expectations were especially high, the reset has been especially painful,'' Mueller said.
Since the end of September, when the B2B bubble began to burst, Ariba's shares have lost about 95 percent of their value, significantly underperforming its peers in the Standard & Poor's software index, which is itself down 27 percent over the same period. B2B software brings buyers and suppliers together over the Web.
Ariba stock closed up $1.24, or more than 16.4 percent, to $8.97 on the Nasdaq.
Mueller said it was time for Ariba to move to what he called the next level, where growth wasn't measured by soaring stock prices and huge revenues, but by ``development and maturity over the long term.''
Mueller likened Ariba's growth path to that of an athlete who wins a one-time race but whose success isn't defined by just that.
``Success is not measured in one season or one competition, but in dozens of competitive cycles,'' Mueller said.
Crunch Point
The CEO's comments come at a critical time for Ariba, as the once high-flying B2B software vendor struggles to get back on its feet.
Last month, Ariba posted a loss before charges of $48.3 million, or 20 cents per share, for its fiscal second quarter ended March 31, instead of the small profit Wall Street was expecting.
It also cut a third of its work force and scrapped its merger with Agile Software Inc. (NasdaqNM:AGIL - news), a deal that was considered key to its future.
Analysts attending the conference in Las Vegas said Ariba was going to have to do more than just talk about getting to the next level. It must articulate how it intends to get there.
``Larry's speech talked about retrenching and what you have to do to keep going and win, but what exactly is Ariba going to do?'' said Mark Verbeck, an analyst with Epoch Partners. ``Given Agile, given the write-off of its marketplace software, where specifically, is Ariba going? There was no real content there.''
Brent Thill, an analyst with Credit Suisse First Boston agreed, ``There was nothing new so far,'' he said.
Gathered in Las Vegas for its user conference, Ariba executives were trying their best to put things straight.
Analysts said that will be a tough call, especially given the competition Ariba faces, including from software giants Oracle Corp. (NasdaqNM:ORCL - news), SAP AG (SAPG-p.DE) (NYSE:SAP - news), i2 Technologies Inc. (NasdaqNM:ITWO - news) and Commerce One Inc. (NasdaqNM:CMRC - news).
Thill said Ariba needed to clearly communicate the product roadmap going forward.
``The core component of Ariba's software for the second half of this year was built on Agile, and now Agile's over, they have to explain Plan B,'' Thill said.
Thill added that Ariba was already beginning to build out some of the Agile-style software, which lets buyers and suppliers collaborate over the Web, itself, but said that process would take a long time.
``This is not a story where we're going to see it spike back up next quarter,'' Thill said. ``But the market it's addressing is still in its infancy, so I think they have time.
Mueller said Ariba's No. 1 priority would be its customers.
``Along the way for Ariba, there have been many fans and they made a lot of noise,'' Mueller said, taking a swipe at the hundreds of dot-com firms and start ups which bought Ariba's software and who have since gone out of business.
Ariba got carried away and was distracted by the hype those dot-coms created, Mueller admitted. ``But I am not distracted now,'' he said. |
