SAP to acquire cloud-based procurement offering Ariba for about $4.3 billion

Tom Paine

SAP just announced it will acquire Ariba for approximately $4.3 billion, a 20% premium on yesterday's close.
Although not a complete surprise, Ariba was probably not too high on the various lists of possible SAP targets that float around.

Ariba provides a cloud-based service for B2B business commerce and procurement.

It is based in Sunnyvale, California. Ariba has approximately 2,600 employees, and recorded $444 million in total revenue and 38.5 percent annual growth in 2011. Net income was $33 million, although Ariba posted a slight operating loss.

Ironically, heavy put action was reported on Ariba on Monday.

SAP acquired cloud HRM vendor SuccessFactors in December 2011 for $3.4 billion to strengthen its position in the Cloud. However, although SAP gave SuccessFactors founder Lars Dalgaard responsibility over all of its Cloud offerings, it said in today's statement that "it is planned to consolidate all cloud-related supplier assets of SAP under Ariba" and maintain Ariba as an independent company within SAP.

SAP is already a significant player in the procurement space, as is Oracle. SAP boosted its presence with the acquisition of Crossgate late last year. Perhaps the fastest rising up and comer, Coupa, just raised another $22 million in venture capital.

SAP said in its statement that "the Ariba network will benefit from the performance delivered by using SAP's in-memory platform SAP HANA".

Spend Matters' Jason Busch commented at the end of last month, "We will also be sharing our analysis of SAP's new SRM interface, which bears a surprising resemblance to Ariba's new UI as well".

SAP to Expand Cloud Presence with Acquisition of Ariba (PR Newswire)


Highlights: Last week on Philly Tech News (5/14/2012 to 5/20/2012)

I reported on how T-Mobile is using the breakup fee and spectrum received from AT&T to reboot its strategy on several fronts, and the role the Philadelphia region plays in it.

Newtown-based Freedom OSS, from which I'd heard little for a while, resurfaced as a subcontractor to Lockheed on a new $250 million contract for building a private Cloud environment for the Army. Which makes me wonder, does the Army actually have someone named Private Cloud?

I covered SAP's mega trade show, Sapphire, remotely (it was held in Orlando). The two biggest topics there were probably SAP's effort to provide a clearer roadmap for its Cloud strategy, and rolling out new capabilities and applications for its in-memory HANA platform.

China signed off on Google's acquisition of Motorola Mobility on Sunday, and the deal closed this morning. According to one report citing Motorola's new CEO, Google has not decided yet what to do with its Horsham-based set-top box business.

Exton-based Bentley Systems held its annual "BE Together" user conference at the PA Convention Center last week. Among other things, Bentley announced an acquisition and also said it was opening a new office in Center City Philadelphia that could house up to 50 employees.

A Center City startup which began life as Storably, a site for renting out things like spare parking spaces and storage space, saw that wasn't gaining much traction and so it did a major pivot and launched last week as Curalate, a web service that helps marketers develop programs on Pinterest. First Round Capital, New Enterprise Associates, and UPenn-related MentorTech Ventures are investors.

Philadelphia Media Network CEO Greg Osberg stepped down, although he will continue as an advisor for a while. Although Osberg described it as a move he had planned to make once the ownership change was completed, this New York Times report suggested he may have been pressured out ahead of schedule.

The Philly Fed manufacturing index took a rather dramatic downward plunge into negative territory in May.

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Daily Links 5/22/2012: Google closes acquisition of Motorola Mobility; What happens to Horsham operations?

It's Official: Google Is Now a Hardware Company (Bloomberg Business Week)
Deal closes. Story cites new head of Motorola Mobility as saying Google hasn't figured out yet what to do with set-top box business.

Clash of the Theme Parks
Universal, armed with cash from Comcast, takes aim at Disney
(New York Times)

Accelerating our Cloud Business (Lars Dalgaard)
Leaked internal memorandum by SAP Cloud chief confirmed as authentic by two top reporters on SAP beat. Must read for SAP
and Enterprise Cloud followers.

Why athenahealth might buy Epocrates (MobileHealthNews)

Physician education software expanding to patients, med students (Med City News)

QED Proof of Concept Program Opens Fifth Round With New Participants and New Special Emphasis Topic (Globe Newswire)
University City Science Center program adds a special track focusing on digital health technology.