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Ariba Gains Legs Courtesy of Descartes

Written By: Steve McVey
Published On: June 12 2000

Ariba Gains Legs Courtesy of Descartes
S. McVey - June 12, 2000

Event Summary

Internet purchasing vendor Ariba announced a strategic alliance with Descartes Systems Group, a provider of Internet logistics solutions in which Ariba will deliver a suite of Internet hosted services through its Commerce Services Network (CSN). The new offerings, tentatively dubbed "Ariba Logistics and Fulfillment Services - Powered by Descartes" are intended to give buyers, suppliers, and B2B trading networks access to the logistics services needed to complete the order cycle, that is, deliver the goods.

Among the planned services are global visibility of order status, exception-based performance monitoring, total shipment cost calculation, delivery optimization, and Internet-based transportation management. Ariba expects to offer its services to users on a subscription and/or transaction fee basis. Descartes' B2B Internet logistics infrastructure will also be linked to Ariba CSN to connect buyers, suppliers, B2B marketplaces and logistics providers.

Market Impact

Few would doubt the benefits achieved by marrying Descartes' network of logistics providers with Ariba's online purchasing communities. The belief that e-commerce can work only when supported by sound backend fulfillment operations is widespread among practitioners and is continually reinforced by the press and analyst community.

The fact remains that a seamless rapport between Web-based ordering and the delivery of goods that truly optimizes each of the intervening operations has yet to be achieved by any application. Thus far, most companies have been content to simply have a web presence that allows them to reach the buying public and take orders. The new alliance between Ariba and Descartes has strong potential to accomplish the next phase in e-commerce execution, that of fulfillment.

Of the myriad potential candidates that Ariba could have chosen for logistics fulfillment, Descartes is probably the best. Over the past three years, Descartes has assembled a comprehensive, componentized logistics planning and optimization suite and has considerable experience in deploying its logistics capabilities to clients over the Internet. In fact, more than 80% of Descartes' revenues are derived from Web-based application deployment.

In addition, the new alliance falls into line with Descartes' strategy of providing the tools necessary for Internet fulfillment, but not building and branding its own marketplaces. Ariba's position as a purveyor of Internet portals for e-commerce fits well in this strategy and neatly avoids conflicts in business direction with Descartes, the "fulfillment arms dealer to the superpowers."

User Recommendations

For companies who sell to consumers via Internet B2C sites, Ariba should now figure more prominently in selections. Because the Internet dissolves physical distances, companies are faced with the sobering fact that competitive sites lie a mere mouse-click away from their own. Web businesses that fail to deliver goods promptly risk losing customers to companies with superior fulfillment capability. Potential clients should be wary, however, since these alliances lead to integrated solutions only after considerable investments in time and money on the part of the partners. Often, the result falls far short of the hype, but is often a strong step toward future functionality and architectural enhancements that ultimately may deliver on the promises.

 
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