The Ariba Commerce Cloud: Stratus Or Cumulus?

Bob Calderoni and Tim Minahan, Ariba’s CEO and CMO respectively, explained their vision for the future of supplier networks at the company’s Ariba Live customer event this week. The basic concepts, of a B2B community with value-adding services for sellers, such as prospect discovery and multi-customer e-invoicing, is one I’ve advocated to network providers for a long time, including in my report of internetwork interoperability (Enterprises Should Push Supplier Networks To Deliver Interoperability). The community concept is certainly fashionable at the moment, with lots of business-to-business (B2B) technology vendors trying to match the success of Facebook, LinkedIn, Twitter, and the like. The big question is whether Ariba can achieve the universal reach that the commerce cloud will need if it is to deliver value to its members.

Social media consumers don’t seem to be worried by monopolies. As my daughters tell me, people of their age have to be on Facebook to know what’s going on. There’s no point using other services like MySpace or Bebo (or, for older readers, Yahoo Groups, Geocities, Friends Reunited, and their equally overhyped predecessors), because everyone uses Facebook, and the community only works if everyone’s in it. It’s the same with B2B eCommerce — supplier-side members want to know about all the relevant parties (i.e., RFX’s), and party organizers (i.e., buyers) want to publish the invitation in one place yet still reach all their potential friends. In practice, this means the community must either be:
a) a broad stratus formation covering everything, Straus cloud cover

or b) one of many interconnected, fluffy cumuli.Cumulus clouds
(Source: http://commons.wikimedia.org/wiki/Clouds)

In the transactional network side, Ariba understands that it can only achieve the necessary global reach by interoperating with other major networks. That’s hard enough for structured processes, let alone the unstructured troposphere of B2B communities. Ariba may wish it could become a ubiquitous, dominant player like Facebook (Amazon and eBay may be better analogies), but I’m not sure that’s achievable, or desirable: would-be members of the commerce cloud want to be part of one universal marketplace that gives sellers access to all potential buyers and vice versa, but, OTOH, they want competition between providers, to keep membership fees under control.

Bottom line: Ariba’s vision to provide a wider range of value-adding services to its member community is a good one, but it mustn’t abandon its commitment to openness — the real enemies (of Ariba specifically, and of eCommerce in general) are still the single-buyer supplier self-service portals, and the sub-scale closed networks.