IBM is Not Enough; Ariba Announces Strong Partnership with Dell

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


Event Summary

Dell (NASDAQ: DELL) will create a B2B marketplace for small and medium customers using technology from Ariba (NASDAQ: ARBA). The market place will bring Dell's suppliers and customers together.

Dell will also preinstall Ariba software on Dell PowerEdge servers, for both individual companies that host their own Ariba purchasing solution and for ASP's. Dell will assist in consulting and implementation for these customers, and Dell and Ariba will engage in joint sales efforts.

Ariba will become the basis for Dell's own worldwide procurement network, and Dell will become a major hardware supplier to Ariba. Finally, Dell will take an equity interest in Ariba.

Market Impact

The new marketplace will allow customers to buy a wider set of products, and will create additional markets for Dell's suppliers. Unlike Dell's GoToBuy site, which places Dell between the two parties of the transaction, the new marketplace will place buyer and seller in direct contact. There will be future announcements of enhanced services in this marketplace.

The announcement puts special pressure on Compaq, which is struggling to (re)create its own direct channel.

User Recommendations

Users should be more interested in the software that they will use, whether installed or through an ASP, than in the precise membership of any particular marketplace.

Although users who desire to procure equipment from Dell will certainly find this announcement attractive, Dell equipment is available in other ways.If either Ariba's software or that of another vendor who serves as an on-ramp to the Ariba Network does not suit you for reasons of function or cost, we think that you should stick with your overall evaluation when choosing a procurement solution.

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