If you were hoping to gain insights into whether SAP paid too much for Ariba (and it's $2 billion of tax loss carryforwards) or if it will be successful cross selling the Ariba solution or if it will finally succeed with the proprietary Ariba network (despite earlier attempts e.g. Commerce One) in becoming the brains of the Borg collective of commerce in its positing of a winner-take-all market – I've got nothing for you.
I do have 3 insights into something I care deeply about – what does this mean for Coupa. Despite not an Ariba shareholder among us, the Coupa management team was all high-fives yesterday upon hearing the news of SAP’s acquisition.
First, Coupa’s presence in the market is going to gain immediate benefits. In my long career as a equity analyst covering the software industry, the easiest call to make has always been to buy the stock of the focused competitor. The examples are numerous:
Siebel buys Upshot, Oracle buys Siebel – benefits salesforce.com. Enough said.
IBM buys Ascential – benefits Informatica which now dominates the data integration market
And now benefits will accrue to Coupa, regardless of whether or not the Ariba acquisition delivers on the benefits that SAP anticipates. As the leading independent provider of Spend Management and Optimization software, Coupa's focused task of putting distance between us and the field just got a lot easier.
Secondly, SAP management’s assertion that it wants to maintain the Ariba relationships with its ERP competitors like Oracle, Infor, Microsoft, and Maximo, doesn’t matter. At my previous company, BLADE Network Technologies, Cisco’s decision to compete in the data-center server market with HP, IBM and Dell was incredibly beneficial to our business. I honestly believed that Cisco management didn’t want to attack IBM and its move was more about HP, but that doesn’t matter when you get into the field and a salesperson is trying to put food on the table. Even if management is sincere about wanting to maintain détente with its competitors in this area, if the field SAP reps will be trying to use the Ariba presence in accounts to take business away from Oracle and others.
And third, competitors with multiple solutions like SAP has now will only confuse customers and paralyze its team. While the former Ariba folks will have seemingly no doubt about what the go forward solution is, the SAP SRM team and its significant installed base are not in the same position. Oracle’s Fusion project to bring together its multiple ERP and CRM products resulted in years of delayed sales as customers put purchases on hold while Oracle tried to figure things out. Microsoft’s attempt to merge its multiple ERP acquisitions with Project Green produced similar results.
The team here at Coupa couldn’t be more excited and we wish the SAP team the best and offer our thanks.