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IBM and Ariba Cut Cloud Deal

Ariba manages collaborative inter-enterprise commerce with its web-based Discovery sourcing and sales process solutions

IBM has cut a cloud deal with Ariba, the B2B trading site that's now billing itself as a cloud.

Terms were not disclosed but their arrangement is supposed to enliven Ariba's eHarmony-type buyer-and-seller matching service by integrating its newly restyled Commerce Cloud with IBM's LotusLive.

Ariba manages what its marketing folk call collaborative inter-enterprise commerce with its web-based Discovery sourcing and sales process solutions. LotusLive will give it cloud-based integrated e-mail, web conferencing, social networking and collaboration services.

Since face-to-face meetings, phone calls, faxes, document-driven interactions and spreadsheets are going the way of doctor visits to the home-bound sick, the integrated solution is supposed to help buyers and sellers interact, answer questions and exchange information prior to entering any formal contracts.

Evidently we should interpret this development in terms of IBM's announcement Monday that it's buying Sterling Commerce for a pretty $1.4 billion.

Sterling makes the EDI plumbing that helps companies create supply chain connections. It also runs its own supplier network - like Ariba. IBM's crystal ball says web commerce traffic will triple in the next three years so it needs to flog more software that facilitates Internet-based business interactions.

Ariba would counter that the EDI model is costly, complex and doesn't scale to all suppliers. Folks can replicate piping, but they can't replicate the relationships and the value of the broader community that the Ariba Network - er, Commerce Cloud and the Ariba Network within it - bring. And this community - and the collaboration that it fuels - is what's necessary for companies to reach the next level of productivity.

Since Ariba's decided that it's really a cloud and to act like one it's pulling in other capabilities: category- and business-specific information about companies; information sharing/networking; on-demand, spend/financial management software; credit facilities; receivables exchanges; and LotusLive direct connections.

It'll maintain that for the first time, buyers and sellers can go to one place to access everything they need to make business commerce easier and consumer-like. Finding suppliers becomes as easy as finding old classmates on Facebook. Buying aluminum becomes as easy as buying a book on Amazon. Managing capital becomes as easy as paying your bills online. Adding LotusLive is supposed to be the first of many things that Ariba is going to do to fuel true collaboration and simplify business commerce. Whether the world will be a better place remains to be seen.

Something like 300,000 companies, including more than 80% of the Fortune 100, representing a spend of $140 billion a year, already use Ariba solutions. However, it also says that upwards of 80% of B2B commerce transactions are completed manually and that companies still send 85% of their invoices and payments on paper, an inefficiency that costs $650 billion a year.

For IBM Ariba is just another cog in a developing ecosystem.

More Stories By Maureen O'Gara

Maureen O'Gara the most read technology reporter for the past 20 years, is the Cloud Computing and Virtualization News Desk editor of SYS-CON Media. She is the publisher of famous "Billygrams" and the editor-in-chief of "Client/Server News" for more than a decade. One of the most respected technology reporters in the business, Maureen can be reached by email at maureen(at)sys-con.com or paperboy(at)g2news.com, and by phone at 516 759-7025. Twitter: @MaureenOGara

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