Ariba Boosts Platform With Troika of Alliances

SAN MATEO (03/17/2000) - Ariba Inc. this week inked alliances with Dell Computer Corp., American Express Co., and multinational grain manufacturer Cargill Inc., giving a boost to Ariba's business-to-business platform.

Under the terms of their agreement, American Express is developing electronic payment services that will be hosted on the Ariba network, officials said.

Separately, Ariba will enter into a broad business-to-business e-commerce alliance with direct-PC vendor Dell.

And finally, Ariba is teaming with Cargill to create an open business-to-business exchange for food and beverage manufacturers and their suppliers called Novopoint.com, which will be powered by the Ariba B2B Commerce platform.

Both American Express and Dell have acquired a stake in Ariba. Financial details of all three agreements, which were announced at Ariba's user conference in San Diego last week, were not available.

In addition to using Ariba's platform for its e-procurement solutions, Dell will also connect its current business-to-business initiative (the company's 40,000 premier pages) to the Ariba platform, according to Joe Marengi, senior vice president and general manager of the Dell Relationship Group.

Dell intends to target more small and midsize businesses with its e-procurement solutions, while keeping its premier pages targeted at the company's larger corporate clients, Marengi said.

Dell will also offer prebundled and preconfigured Ariba solutions on its PowerEdge Servers, Marengi added.

While Dell brings 40,000 customers into the Ariba network, American Express expects to bring 50,000 suppliers onto Ariba's platform, said Ed Gilligan, president of American Express Corporate Services. American Express' current B2B Commerce Network, like the Dell premier pages, will be connected to the Ariba platform, thereby creating what Gilligan refers to as "the first market-to-market network."

"We are embedding our payment network into the Ariba network," Gilligan said.

One analyst applauded the approach.

"It's not B-to-B [business-to-business]; it's not B-to-C [business-to-consumer]; it's B-to-B through B-to-C," said Jeff Fieler, an analyst at Dresdner Klienwort Benson. "The theory is really sound. It's just a question of actually executing it and implementing it. It's not so much the technology that's important, it's also the strategy around that technology."

Fieler said he sees the interoperability of networks as the wave of the future.

Companies need to be able to compete in market-to-market networks to succeed.

"Interoperability of exchanges is a very important aspect. You take the B-to-B Ariba solution and the CommerceOne solution, and [interoperability] is something they advocate. You take other solutions out there right now, someone like Oracle for example, most of their exchanges are stand-alone -- that's actually a strategic shortcoming for them," Fieler said.

Cargill officials said the Novopoint marketplace will give buyers and sellers one place to exchange food ingredients, packaging, and related services.

Ariba Inc., in Mountain View, Calif., is at www.ariba.com.

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