With a major challenge from Oracle (Nasdaq: ORCL) looming, business-to-business e-commerce solutions provider Ariba (Nasdaq: ARBA) is strengthening its global presence. On Friday, Ariba announced that it has opened five new regional hubs to provide support for its European clients in the United Kingdom, Germany, the Netherlands, Sweden and Switzerland.
These clients include Philips Electronics in the Netherlands and SairGroup in Switzerland. Two companies which have combined sales of more than $40 billion (US$).
Ariba’s announcement comes two days after Oracle announced that it would launch an online procurement service later this year. This new venture, known as Oracle Exchange, will feature purchasing-related content, services from more than 260 companies, and compete directly with Ariba for the rapidly growing business-to-business market. According to Forrester Research, the market is expected to grow from $43 billion in 1998 to $1.3 trillion by 2003.
MCI WorldCom Signs Up With Ariba
In related news, Ariba announced Friday that MCI Worldcom has signed a client agreement to use Ariba’s business-to-business e-commerce solution. MCI expects to use the service to aggregate and direct company-wide operating resource spending to preferred suppliers. This will allow the company to take advantage of volume discounts and also reduce costs by streamlining the acquisition process.
“As a global leader in telecommunications, MCI WorldCom is a pacesetter for the strategic use of business-to-business e-commerce,” said Dave Rome, vice president of marketing at Ariba.
Ariba’s products and services help companies simplify the acquisition and management of operating resources by allowing buyers and suppliers to automate transactions on the Internet. Ariba’s solutions have by licensed by companies including Cisco Systems, AMD, General Motors, Visa, Hewlett-Packard, Merck, Nestle, Seagate, Chevron and Federal Express.
In addition, Ariba has alliances with companies such as American Express, barnesnandnoble.com, beyond.com, Dell, Microsoft, Sun Microsystems and even Oracle.
Despite all the positive news, shares of Ariba fell 5-13/32 to 89-13/32 on Friday, partially because of concern about the new competition from Oracle. Still, Ariba stock has held up rather well recently, considering the recent downturn in the Internet sector. The company went public at $23 on June 23. The stock opened at $63 and closed at $90 on its first day of trading.
Shares of Oracle were unchanged at 38-1/16 on Friday.