Ariba CEO attempts to divorce B-to-B label

During his first earnings call as the head of Ariba Inc., CEO Robert Calderoni took pains to distance his company's purchasing products from the term B2B and from the IT solutions in general.

Calderoni had served as the Sunnyvale, Calif.-based company's chief financial officer since January and last week was elevated to CEO.

As expected, Ariba continued its revenue plunge, to US$62.6 million for the quarter ended Sept. 30, down from $85.3 million in the previous quarter and $134.9 million for the same quarter last year.

The net loss for the company was $224.3 million for the most recent quarter and $2.68 billion for its recently concluded fiscal year, according to its quarterly financial report released yesterday.

Faced with the challenge of injecting life into the once red-hot procurement software vendor, Calderoni made it clear that Ariba now views purchasing and financial officers as its chief targets.

He stressed that Ariba can help companies find trading partners in cyberspace, negotiate contracts and monitor the spending practices of employees to guarantee that negotiated savings are realized.

When asked about the threat posed by enterprise resource planning (ERP) vendors such as SAP AG, Oracle Corp. and PeopleSoft Inc. moving into the procurement space, Calderoni said, "The advantage for us is that they're pushing an IT solution, and that's not what the customers need."

In a later interview, he elaborated on that statement.

"IT plays an extremely important role, but there has to be business ownership for software like this to take hold in a company," Calderoni said.

He envisioned Ariba providing a "dashboard" that gives chief procurement officers a view of a corporation's entire spending practices.

Louis Columbus, an analyst at AMR Research Inc. in Cambridge, Mass., said Calderoni's "trying as hard as he can to get people to think of [Ariba] as a tool set for procurement managers. The integration element is definitely on the side of any incumbent ERP vendor, so [Calderoni] has to claim some territory as his own."

Calderoni also didn't use the term B2B once during the earnings call, even though Ariba in the past attempted to make itself synonymous with the acronym.

In the later interview, he said, "I don't know what B2B means. I don't know what collaboration means. I do know what helping customers and saving money is all about. B2B sounds too much like tech and Internet hype to me."

The term will even be purged from Ariba's corporate Web site in the coming days.

"I think the shadow of B2B falls on them and [chief competitor] Commerce One pretty hard," Columbus said. "They were very visible during the rise of B2B and have been out front during the fall."

Calderoni said he expects Ariba's revenue will dip to between $50 million and $55 million this quarter but added, "I feel hopeful about that being the bottom."

The strongest market for Ariba has emerged in Japan, where Softbank Corp. CEO Masayoshi Son has been pushing for Ariba as a de facto procurement standard. This past quarter, Japanese corporations Asahi Beer, Caltex and Samsung Electronics Co. Ltd. all signed on as Ariba customers.

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