IBM is Not Enough; Ariba Announces Strong Partnership with Amex

  • Written By: D. Geller
  • Published: March 30 2000


Event Summary

American Express (NYSE: AXP) and Ariba (NASDAQ: ARBA will cooperate on the development of advanced B2B E-payment services to be deployed over the Ariba Network. The first such service, expected in 60 to 90 days, will support payment upon shipment, with charges to Amex-issues purchase cards. Future services will include most of Amex' financial offerings, from trade financing to business loans.

The two companies will offer enhanced support services to joint customers, facilitating joint development efforts, and will recommend joint solutions to their individual prospects. Ariba's Network and Amex' own Internet-based B2B financial services network, still in a pilot stage, will interoperate fully and openly.

Finally, Amex will use Ariba's software solutions on a worldwide basis for "most of its annual procurement spending."

Market Impact

The most immediate impact is that Amex will be leading its 50,000 business customers right up to membership in the Ariba Network; although they will not have to join, the benefits and easy entre will be powerful inducements - and powerful increments to Ariba's bottom line.

While credit card companies will see threat in this announcement, Amex stated that they intend to create relationships with Visa and MasterCard in the future, as well as to deploy their payment solutions on other (unnamed) networks. We expect that executives from Concur will begin flying to Amex headquarters real soon now, even though such additional deployments are far in the future, because of the instant legitimacy partnering with Amex would add. Note that Commerce One recently entered a similar pact with CitiGroup.

User Recommendations

Users should care, but not take any precipitous actions.

The fact that Ariba and Commerce One now have similar arrangements with financial services firms reinforces our impression that there will be few long-term feature differentiators in the E-commerce world.

Make your selections of software and services based on thorough analysis of features, costs, and corporate viability - and there's certainly not much difference on the latter point between Ariba and Commerce One. Most companies will not be dealing directly with either of these companies in any case, but with ASP's or with providers of other software, such as corporate portals, that may serve as onramps to these giant marketplaces. So the small difference in marketplace features will be more than overshadowed by the larger differences you will find in matches to your other requirements.


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