The future of the Ariba Network is arguably the future of SAP Ariba. As more content, intelligence and capability shifts into not just the cloud but the space between companies, network and platform-based connectivity will become increasingly important for procurement and suppliers alike. Connectivity is even now forming the basis of competition in the procure-to-pay market, with SAP Ariba competitors like Tradeshift making the argument to potential customers that the platform matters as much — or more — than application capability alone.
In a series of posts this week, we’ll tackle the past, present and future of the Ariba Network, as well as the SAP Ariba platform.
The Ariba Network: By the Numbers
On the main stage at SAP Ariba LIVE earlier Wednesday, Ariba shared its latest facts on the network before talking about where it is heading. By the numbers, the network:
- Has 2.5 million companies registered, including 76% of the Fortune 2000 (it was not specified if either of these statistics represents participating/active suppliers or just registered suppliers)
- Has 13 million users
- Processes $1.25 trillion annually in spend (it was not specified if this is based on a single string of transactions counted once, or the aggregate counting of POs and invoices)
- Manages 195 million catalog items
- Exchanges 250 million documents annually
- Processes $50 billion in payments annually (presumably through the Discover partnership)
- Onboards a new company every minute
- Provides 34 million leads annually to sellers
Supplier Fees vs. Free
The Ariba Network has not been without (significant) controversy over the years. The decision to modify its fee structure and start charging suppliers formed the basis of how many competitors would compete against it for many years. But this also created an entirely different business model for SAP Ariba, as well, including yoking it with sellers in a manner that was different than the competition. Arguably, this successful revenue/business model evolution is what attracted SAP to acquire Ariba, as well.
In 2016, SAP Ariba moved to address concerns over supplier fees for smaller vendors with Light Enablement, a free, email-based connectivity offering. It has already garnered considerable traction, according to an earlier presentation ($18 billion in spend across 33,000 suppliers).
At LIVE Wednesday, Ariba announced a broader free offering for suppliers: Light Accounts. Light Accounts essentially provides network-based access to suppliers, including a portal-based account to access for connectivity and opportunities via the network, while also extending the functionality of Light Enablement to credit notes, debit memos and other transactional document types.
This move is smart for SAP Ariba on multiple fronts. For one, it provides “free” suppliers — which are those most likely to take a more aggressive APR-based discount if offered an early payment option — with portal-based access to consider such offers. It also loops them into the SAP Ariba ecosystem and allows them to access the network itself. Finally, and perhaps most important, it lets Ariba tell its procurement customers that it has addressed the “free” issue once and for all with a basic connectivity offering that goes beyond email alone.
What does the future of the SAP Ariba Network hold? Stay tuned as our series continues.
