Renewing the Vows

IBM reaffirms Ariba partnership with sourcing, integration initiatives

ibmpos blurgb 57cf198907bb4

Las Vegas ­ May 3, 2001  IBM made a series of announcements this week at the Ariba LIVE 2001 users conference that appear to reassert Big Blue's commitment to its partnership with Ariba.

At the conference, IBM: unveiled a suite of procurement services to be delivered through the e-procurement platform provided by Ariba; joined with Ariba in announcing that the latter would support IBM's WebSphere integration software; and announced that IBM division Tivoli would integrate its e-marketplace management software with the Ariba Buyer and Ariba Dynamic Trade applications.

IBM and Ariba formed an alliance last year, along with erstwhile partner i2, which essentially backed out of the partnership earlier this year when it acquired e-procurement platform provider RightWorks, an Ariba competitor.

Ariba has struggled recently with a drop in revenues as corporate spending on technology projects has cooled with the slowing economy. Ariba recently announced layoffs of 30 percent of its staff and the appointment of a new CEO. At its Ariba LIVE show this week the company has promoted a "back-to-basics" approach to B2B e-commerce that will see a renewed focus on ensuring its customers' return on their investment in the Ariba system.

The suite of procurement services that IBM and Ariba will offer, dubbed Leveraged Procurement Services (LPS), will be available in June through IBM Global Services. LPS will provide companies with IBM-customized catalogs and pricing for indirect goods and services, as well as Ariba's purchase requisition and reporting capabilities.

Essentially, IBM Global Services will use its sourcing expertise and relationships with suppliers to source goods and services, negotiate contract pricing and assemble the catalogs. Customers will pay a subscription or a per-transaction fee to access the services through either the Web-based Ariba Marketplace Network Edition or Ariba Buyer client software.

Goods and services available through LPS will include basic office supplies, office furniture and equipment, industrial maintenance, repair and operation (MRO) materials and contract labor services. Initial LPS suppliers include: AFFLINK, American Identity, Bruckner Supply, Carlson Wagonlit Travel, CDI Corp., Cirqit, En Pointe Technologies, Lanier Worldwide, LCD Express, Manpower, SHI, Staples National Advantage and Teknion.

LPS also will offer custom acquisition services  for anything from security services to capital equipment  to meet customer-specific or one-time purchasing needs.

IBM believes that LPS will help businesses to cut maverick spending and to save time on customized supplier enablement. "LPS addresses an important need to accelerate the achievement of real returns in procurement  a key concern in the current economic environment," said William Schaefer, vice president of procurement services for IBM.

IBM says it saved $377 million in 2000 through efficiencies gained from e-procurement, compared to $272 million in 1999. IBM currently purchases 94 percent of its goods and services electronically through 24,000 suppliers worldwide.

Pricing for LPS will be subscription- and transaction-based, with fees dependent on a customer's overall spend. IBM, Ariba and select business partners in the United States will be offering the suite of services.

The Web-enabled service, offered through the Ariba Commerce Services Network, does not require the purchase of additional infrastructure. Ariba Buyer is offered through the IBM e-marketplace hosting service for Ariba Buyer, external application service providers and custom Ariba Buyer deployments.

Also at the Ariba LIVE show this week, IBM joined with Ariba in announcing the latter would support IBM's WebSphere integration software, including MQSeries enterprise application integration technology, WebSphere Application Server and WebSphere BtoB Integrator. The two companies billed this move as an expansion of their strategic technology alliance.

IBM division Tivoli Systems and Ariba announced that the companies are integrating Tivoli e-Marketplace Manager with Ariba Buyer and Ariba Dynamic Trade to provide easier e-marketplace administration and heightened security and reliability. A number of these integrated solutions are available today with the remaining set available throughout calendar year 2001.