“We never abandoned our original on-premise customers and their original suppliers. I recently talked with Joseph Fox, Vice President of Marketing Strategy at Ariba, who described Ariba’s transformation in just a few short years like this. Not bad for a company that has its roots in the on-premise world. As the world’s largest, most global network for business-to-business collaboration, Ariba has over 5 million users that process more than 165 million annual transactions. Today, the Ariba Network consists of 1 million connected companies in over 190 countries worldwide. In 2006 Ariba moved to a multi-tenant, software-as-a-service (SaaS) model, giving customers the choice of on-premise or cloud. In doing so, they created a worldwide marketplace that allows buyers to save and sellers to grow. Following the dot.com crash in 2001, Ariba retrenched over the next few years introducing sell side apps and expanding into Europe, South Africa, and Asia. It was originally founded as a web-based solution focused on streamlining the procurement process and taking costs out of the supply chain for enterprise resource planning (ERP) customers-all of whom relied on-premise software over a dozen years ago. Cloud computing is no exception.Ĭonsider the evolution of Ariba. How to innovate with success is the issue. Whether to innovate or not isn’t the question. This kind of logic entirely misses the point about how change happens in the technology industry. Boiled down, the argument goes something like this: cloud disrupts traditional vendor business models so these existing companies are sure to fail. But a spate of recent media coverage bemoans the supposed demise of on-premise software companies.

Research firm IDC predicts worldwide spending on public IT cloud services will approach $100 billion by 2016. Cloud computing is a great example of how this works. They can also have a pesky little problem aligning to the facts. But knee-jerk predictions about which companies will succeed or fail in response to the news of the day are rarely accurate.

It’s a time-honored tradition to dismiss established companies when exciting, new technologies appear on the horizon.

Ariba saas