In-Depth

Ariba: Where Web Services is Headed?

• By Joseph McKendrick
• 10/01/2001

Ariba (new window), of Sunnyvale, Calif., has been an early and active player in the formulation of two Web services standards—UDDI and cXML. With roots in the procurement software space, Ariba has recently returned to a focus on e-procurement capabilities, and building its network to link buyers and suppliers. Its burgeoning network infrastructure, Ariba Commerce Services Network, has all the hallmarks of a Web services environment. The company claims that this interactive “community,” built on open standards, supports 10,000 registered suppliers worldwide.

Ariba introduced cXML, a set of lightweight XML DTDs, in early 1999. It’s cXML standard supports a process called Open Document Routing, embedded within Ariba’s products.

The cXML standard also serves as a wrapper for documents sent to or from non-Ariba systems through Network Connect. “Ultimately, by defining the rules for the transport of documents, cXML functions as an envelope around other XML or non-XML-based documents, EDI documents, RosettaNet, or even Commerce One's xCBL dialect,” says Tim Minahan, vice president of supply chain research for Boston-based Aberdeen Group. “It enables the secure routing of any and all documents across the Ariba Commerce Services Network without the need for protocol mapping or document translation.”

In another area of Web services, Ariba teamed up with IBM and Microsoft in the fall of 2000 to spearhead the UDDI initiative. The company maintains an internal directory of trading partners built on UDDI standards, according to Anne Enna, product marketing manager for Ariba’s Commerce Services Network. While the company does not support a public UDDI directory Website as IBM and Microsoft have done, the next round of product releases will support “easy access to UDDI directories,” says Enna.

Ultimately, Ariba’s Commerce Services Network is the key to the company’s future role in Web services, analysts agree. The company has already gained considerable traction in building a trading community for indirect goods and services. For example, Hewlett Packard Company signed on with Ariba in 1997 to provide purchasing management capabilities for office supplies, and brought its large network of suppliers into the network. The process plays itself out each time a company signs on to Ariba, and has given it a leg up over competitors. “We provide transaction routing on our network, and it’s also a supplier hub,” says Enna.

“Ariba has focused on this concept of the network since day one,” says Minahan. Ariba’s Commerce Services Network “provides a central location for managing transactions and messages, and reducing the pains involved in supplier or trading partner enablement.”

While use of the network itself is free, Ariba benefits in two ways, says Gautam Desai, vice president of licensing for Doculabs of Chicago. First, of course, the network offers a tremendous value proposition to buyers of Ariba e-procurement software. Second, it makes Ariba a leading e-commerce information repository. Ariba can track and log “aggregate statistics about transactions,” he explains. “Web services will enable Ariba to get any and all information out of their centralized system. That includes information from service providers, content service providers, commerce service providers, or any value-added network provider who has applications.”

While Ariba is currently focusing on supplier enablement for online transactions, its long-term offers a clear alternative to the wild world of the Internet. The company’s eventual strategy is to offer e-commerce users a higher level of trust and validation than is available when dealing with the open public Internet. “We provide for things like order routing, transaction management, and supplier registration, which you can’t just do via the Internet,” says Ariba’s Enna.

Analysts concur that Ariba can provide some sort of a validation or service to guarantee the viability of service providers on their network. “There might even be a situation where they can charge for value-added services on this network which they're building,” says Desai. A company that’s tapped into Ariba Commerce Service Network, for example, may want to seek a new low-cost supplier in a spot market, he illustrates. “On the Internet, they find a number of providers overseas, but they're not really sure who they are. That’s where third-party providers who offer services – such as credit checks, credit verifications, escrow services – could hook in directly, using Web services, into the Ariba Network.” Ariba’s network, in turn, can “provide those services in a unified manner, as part of a single transaction,” Desai continues. “That's the reason Ariba is really driving forward with this. They can plug in all sorts of external services and applications with this network”