In May 2012, giant German ERP vendor SAP acquired Ariba, a sourcing strategy and B2B network provider (http://dealbook.nytimes.com/2012/05/22/sap-agrees-to-acquire-ariba-for-4-5-billion/?_r=0).
Since then, SAP and Ariba have actively deployed solutions in the financial services domain, including SAP’s Financial Services Network (FSN), the connectivity hub that connects banks and other financial institutions with their corporate customers on a secure
network owned and managed by SAP. A year later, Ariba signed a strategic partnership with Discover to support B2B payments over the Discover Network.
While it is clear how Ariba and Discover intend to partner by linking the physical supply chain (i.e., via the Ariba Network) with the financial chain (i.e., Discover Network’s payments), after almost 18 months SAP has revealed no clear strategy on how it
intends to leverage the Ariba acquisition for financial services. The combination of the Ariba Network and SAP's FSN should enable SAP to integrate the physical and financial chains of its customer base, but no such announcement has been made. What will SAP
do with Ariba? While Ariba's “arm's-length” management policy may reassure some of its existing clients that their investment in Ariba will preserved, the firm should provide some clarity on future direction for those waiting to see what integration process
they await and what fruit the process is likely to bear.
Otherwise, the market will suspect that the acquisition was purely about driving shareholder value. Ariba’s shareholders enjoyed a once-in-lifetime premium of nearly 20% over the company’s share value when the company was acquired by SAP, and some may accuse
SAP of grabbing control of a specialized and highly populated B2B network with no true intentions other than expanding market reach. While this option would not be inherently wrong, it would certainly dilute the expectations on SAP's ability to build a globally
integrated B2B financial supply chain.
The upcoming EuroFinance event would be the ideal venue for SAP to provide a clear strategy proposition regarding the future of SAP's FSN and Ariba. Will it make an announcement, or won't