Initial Public OfferingInitial Public Offering
June 1999June 1999
The Leader inBusiness-to-BusinessElectronic Commerce
for Operating Resources
The Leader in Business Buyers
FY 1997 FY 1998 FY 1999
$9.5$9.5
$6.9$6.9
$4.7$4.7
$2.5$2.5
$0.7$0.7$0.5$0.5
Q2Q2Q1Q1Q4Q4Q3Q3Q2Q2Q1Q1
( $ Millions ) ( $ Millions )
The Leader in Revenue
FY 98FY 98 FY 99FY 99
� Huge MarketHuge Market
� Winning SolutionWinning Solution
� Leveraged Growth StrategyLeveraged Growth Strategy
� Solid Business ResultsSolid Business Results
Investment Highlights
B-to-B Market Size
Source: Forrester Research
1998 1999E 2000E 2001E 2002E 2003E
$1,331
$251
$43
$499
$109
$843
US E-Commerce Transaction VolumeUS E-Commerce Transaction Volume
$108( $ Billions )
Business
to-Business
Business
to-Consumer
Source: Killen & Associates, 1997
ManufacturingResources
OperatingResources
33% Human Resources
Profit, Dividends
Taxes, Other
Corporate Spending
100%100%
Services
OfficeEquipment
InformationTechnology
MRO Supplies
Travel & Entertainment
OperatingResources
Operating Resources Include
The Opportunity Quantified
$8B
$7B
$3B
$7B
$2B
$4B (IT Only)
AuthorizationAuthorization
Purchase OrderPurchase Order
RequisitionRequisition
AcknowledgmentAcknowledgment
ReceivingReceiving
BuyerBuyer
Mail CheckMail Check
InvoiceInvoice
Bank
SupplierSupplier
Accounts PayableAccounts Payable
ShipShip
3-Way Match3-Way Match
OperatingResources
The Problem� Costly Costly
� Paper IntensivePaper Intensive
� Lack of ControlLack of Control
OperatingResources
The Consequences� Maverick BuyingMaverick Buying
� Fragmented PurchasingFragmented Purchasing
� No Economies of ScaleNo Economies of Scale
15-27%15-27%Higher Costs*Higher Costs*
*Source: AMR Estimate, 1999
OperatingResources
Profit
ManufacturingResources
Human Resources
Taxes, Other
The Opportunity� Extraordinary ROIExtraordinary ROI
� Significant EPS ImprovementSignificant EPS Improvement
� Huge MarketHuge Market
� Winning SolutionWinning Solution
� Leveraged Growth StrategyLeveraged Growth Strategy
� Solid Business ResultsSolid Business Results
Investment Highlights
Requirements
InternetInternet
BuyersBuyers
LeverageLeverageExistingExisting
InvestmentsInvestmentsMaintainMaintain
BrandBrandOpenOpen
StandardsStandards
ExpandExpandCustomerCustomer
BaseBase
SuppliersSuppliers
EnterpriseEnterpriseIntegrationIntegration
Flexible Flexible BusinessBusiness
RulesRulesInformationInformation
AccessAccessEase of UseEase of Use
The Ariba Network
Built From the Ground Up
The Ariba Winning Solution� BuyerBuyer � SupplierSupplier
Extraordinary ROIExtraordinary ROI
Automate ProcessAutomate Process Reduce Costs per TransactionReduce Costs per Transaction
Global Economies of ScaleGlobal Economies of Scale Gain New CustomersGain New Customers
Eliminate Maverick PurchasingEliminate Maverick Purchasing Increase Revenue Per CustomerIncrease Revenue Per Customer
Why Ariba Wins
� Internet-Centric ArchitectureInternet-Centric Architecture
� ERP IndependenceERP Independence
� Core CompetencyCore Competency
� First-Mover AdvantageFirst-Mover Advantage
� Blue Chip Buyers & SuppliersBlue Chip Buyers & Suppliers
� Huge MarketHuge Market
� Winning SolutionWinning Solution
� Leveraged Growth StrategyLeveraged Growth Strategy
� Solid Business ResultsSolid Business Results
Investment Highlights
Target Leading BuyersTechnology Transportation
Pharmaceutical
Consumer & Distribution
Software
Network Infrastructure
Energy
Finance & Public Sector
Attracts the Leading Suppliers
Services, Logistics, Payment
Information Technology Internet Resellers
Office Products
Equipment & Supplies
Leveraged Growth Strategy
Barriers to Entry
Leverage
OperatingOperatingResourceResource
ManagementManagement
FortuneFortune500 Leaders500 Leaders
SuppliersSuppliers& Partners& Partners
Ariba NetworkAriba Network
GlobalGlobal2000 Majority2000 Majority Mid-MarketMid-Market
Value-AddValue-AddServicesServices
VerticalVerticalCommunitiesCommunities
Value PropositionValue Proposition
Loyal MembersLoyal Members
LeverageLeverageE-CommerceE-Commerce
Network Revenue Model
� Up-front FeeUp-front Fee
Perpetual Transaction CapacityPerpetual Transaction Capacity
Base Product & ModulesBase Product & Modules
� Recurring Annual SubscriptionRecurring Annual Subscription
Ariba.com NetworkAriba.com Network
Upgrades, Support, HotlineUpgrades, Support, Hotline
Future Value-Added ServicesFuture Value-Added Services
Additional CapacityAdditional Capacity
Follow-on ModulesFollow-on Modules
� Follow-on RevenueFollow-on Revenue
Conservative Accounting
� Conservative Revenue RecognitionConservative Revenue Recognition
� No Capitalized R&D No Capitalized R&D
� Strong Cash PositionStrong Cash Position
� Predictable ModelPredictable Model
� Huge MarketHuge Market
� Winning SolutionWinning Solution
� Leveraged Growth StrategyLeveraged Growth Strategy
� Solid Business ResultsSolid Business Results
Investment Highlights
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