The biggest vendor story of the year officially broke yesterday, albeit that the grapevine had been rustling with rumours for some time. Ariba’s decision to pay $93 million for its Atlanta-based rival Procuri marks out perhaps the first step in a consolidation strategy that would appear – at least on this evidence – to be focusing on the numbers rather than looking to breach new market territory.
While Procuri’s customer base has a wider span than Ariba’s, with some penetration into the SME sector, their core customer profile is broadly the same. And from a technology point of view there is a great deal of overlap, which begs the question whether Procuri will go the way of Freemarkets and essentially disappear from view, with the TotalSource product set swallowed whole by Ariba and Procuri customers ‘invited’ to upgrade to an Ariba solution.
One area in which Procuri can add to the Ariba story effectively is by delivering on-demand revenues. Despite a concerted drive in this direction for some years now, Ariba has yet to create real traction in the on-demand market – especially outside the USA. Procuri’s on-demand customer base creates an instant and significant beachhead in this space and it will no doubt play well with Wall Street.
Whether it plays quite so well for Procuri’s customers is an altogether different issue.
