SAP eyes cloud super network with Ariba buy

Summary:SAP America is looking to develop "the business network of the future" with the acquisition of cloud-based business commerce network Ariba, at the price of US$45 per share, amounting to approximately US$4.3 billion.

SAP America is looking to develop "the business network of the future" with the acquisition of cloud-based business commerce network Ariba, at the price of US$45 per share, amounting to approximately US$4.3 billion.

Each party will be bringing something significant to the table. Ariba already has the buyer-seller collaboration network, which is intended to compliment SAP's existing customer base, as well as its B2B and on-premise solutions. This, in turn, gives SAP a big push in the cloud space.

(Credit: SAP)

SAP will also be bringing its own resources to boost Ariba. For example, SAP is integrating its flagship HANA in-memory platform to improve Ariba's network performance.

Based on the press release, the idea is to build a comprehensive, one-stop business networking option, which "enables companies to achieve a closed-loop from source-to-pay, regardless of whether they deploy in the cloud, on-premise, or through a combination of both".

(Credit: SAP)

Like most other cloud platforms and products that are emerging right now, SAP is also touting increased visibility into business intelligence and data throughout, thanks to the integration of Ariba and SAP business network procurement solutions.

Expected to close by the end of the third quarter of 2012, the merger will consolidate all of SAP's cloud-related assets under the Ariba umbrella.

Ariba is, however, going to retain some level of independence, as the company will keep its own leadership team and will operate under the name "Ariba, a SAP company". Furthermore, current Ariba CEO Bob Calderoni will be nominated to the SAP global managing board, once the deal is done.

During a conference call with analysts and investors on Tuesday afternoon, SAP co-CEO Bill McDermott assured that this merger would "maintain the openness of the business network" while also offering business customers the option to connect to other companies on any other source system, provided by competitors such as Microsoft, NetSuite and Oracle.

Calderoni concurred, emphasising that the combination of SAP and Ariba "comes at time when a revolution is occurring in business", as enterprises become more dependent on working with external partners.

SAP co-CEO Jim Hagemann Snabe referred to the merger with Ariba as a "game-changing opportunity" because a fully-networked business environment could eliminate guesswork, allowing customers to optimize the delivery of products and services to the right customers, at the right time, and at the right price.

As SAP moves farther into the global cloud space, it's also expecting some big rewards. SAP executives predicted that the merger will produce approximately €2 billion in cloud revenue alone, by 2015.

Via ZDNet US

Topics: Cloud, SAP

About

Rachel King is a staff writer for CBS Interactive based in San Francisco, covering business and enterprise technology for ZDNet, CNET and SmartPlanet. She has previously worked for The Business Insider, FastCompany.com, CNN's San Francisco bureau and the U.S. Department of State. Rachel has also written for MainStreet.com, Irish Americ... Full Bio

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