SAP Acquiring E-Commerce Vendor Ariba for $4.3 billion

The move expands SAP's presence in cloud software
By Chris Kanaracus
News May 23rd 2012

SAP is buying cloud-based e-commerce vendor Ariba for US$4.3 billion, the companies announced Tuesday.

Ariba's platform focuses on business-to-business commerce transactions. It makes a natural fit with SAP's "broad customer base and deep business process expertise," SAP said in a statement.

The deal has been unanimously approved by Ariba's board and is expected to close in the third calendar quarter of this year, subject to stockholder and regulatory approvals.

When complete, the Ariba transaction will substantially grow SAP's footprint in cloud software, which got a previous boost from its recent $3.4 billion acquisition of SuccessFactors, a company focused on human resources applications.

At its Sapphire conference last week, SAP spelled out further details of its overall cloud computing strategy, with which it hopes to shoulder aside rivals such as Oracle as well as pure cloud vendors like Workday and NetSuite.

Ariba had $444 million in revenue during 2011 and has 2,600 employees. Its trading network is involved with more than $319 billion in "commerce transactions, collaborations, and intelligence among more than 730,000 companies," according to a statement.

When the deal closes, SAP will "consolidate all cloud-related supplier assets" under the auspices of Ariba, which will operate as an independent subsidiary. Its CEO, Bob Calderoni, will be nominated to SAP's global managing board.

Those plans suggest that SAP is eager to make Ariba's substantial user base, which has other options for B2B commerce platforms, feel secure in their investments.

Ariba's network will grow to more than 1 million companies this year, SAP co-CEO Bill McDermott said during a conference call with media and analysts. "The growth opportunity in this arena is huge," he said.