Ariba eyes profit by June

B2B software firm is looking forward to summer...

Ariba is confident of a return to profitability this summer, after dumping e-marketplaces in favour of a strategy aimed at helping companies control procurement costs. Speaking today in Rome at the worldwide launch of the Enterprise Spend Management software suite, Bob Calderoni, CEO of Ariba, said the company is on course to hit pro forma profit by June, following stringent cost cutting and renewed customer interest. The renewed confidence follows a turbulent year for Ariba in which it struggled with numerous management reshuffles, a failed merger, and falling e-marketplace revenue. Calderoni, who took the helm at the end of last year, said: "Six months ago we were a one product procurement company. It was a point of criticism, and it was a fair criticism. "In six months we've become a company with a vision, and we've made this progress during the most challenging environment we'll face as a company." Results for the last quarter, posted in January 2002, showed a loss of $64m against revenue of $55m. The Spend Management software adds multi-language sourcing, contract management, invoice management and analytical tools to Ariba's e-procurement suite, as well as providing updated versions of the buyer and workforce programmes. Similar features have also been adopted by Commerce One its latest release version 5.0. Analysts attending the event expressed a degree of confidence in Ariba's approach. Andrew Ball, an analyst with Frost and Sullivan, said: "They've had the courage to take on a new strategy when it was obvious e-marketplaces weren't working." But despite the anticipated return to pro forma profitability, the company is still set for an uphill struggle. "They're a software company, if you torture the figures enough you'll get an operating profit," said Andy Kyte, industry analyst with the Gartner Group, echoing the general consensus that Ariba has more to prove with its new strategy, than a summer break-even target The real attraction for customers, he added, would be proof that Ariba could clinch leadership in the developing spend management market. But that promises not to be an easy task, with Ariba itself forecasting competitors such as Oracle and SAP on the scene within the next year or two, as well as new competition from Commerce One in the sourcing market. For more on Ariba,