Ariba's Legacy Base -- In Want of Kinder, Gentler Contractual Hands

Over on the Gartner blog site, Debbie Wilson has dangled out a few of the details from a $95 research brief that suggests she's been busy fielding inquiries from irked Ariba customers. What's their cause for such spend consternation? Debbie sums up what we've all been hearing in the market by noting that "Ariba's on-premises 8.2, and 4.4 and earlier products moved to Ariba's Retired Product Service Program on 30 June 2009, a year after it released its 9r1 product series." Moreover, "Ariba announced that support for versions prior to 9r1 ends 31 December 2010." Now, it would be easy to read this as a not-well thought out move designed to force the hand of older Ariba shops (Version 8.0 of Buyer dates back to 2002 timeframe if you're curious about some history here). Perhaps it isn't, but I did some additional homework and the situation is not black and white. Moreover, there appear to be segments of the market that are quite vocal in voicing their opposition to Ariba's plans and argue that Ariba was too quick to require a move, and others who seem to be accepting of an eventual migration approach. Debbie paints one extreme. Perhaps reality falls somewhere in the middle.

For example, I'm not sure if I entirely agree with Debbie that Ariba did not provide adequate notice of products and support earlier. In her post, Debbie writes: "Its [SIC] also a good heads up to vendors that it is in your best interest to help customers plan as far in advance as possible for upgrades". Did Ariba do this? If you talk to Ariba, they claim they did, providing 2 years advanced notice of any required upgrades. If you talk to some of their customers who are less than pleased, it sounds like they did not, or at least they failed to adequately communicate earlier in the process. I recently had the chance to speak to Ariba's Jon Stevens, who runs consulting services, and confronted him with a few recent examples that I've personally heard about where customers were quite irked at Ariba's forced migration plans. Jon told me that as early as 2008 at Ariba LIVE (April/May timeframe) that Ariba began to formally announce its upgrade plans. According to Jon, "we reminded customers at the time [about their original contract commitment]" which would require them to eventually move off unsupported products as new releases came out.

Jon shared that this upgrade/migration decision impacts 200 legacy installed Ariba customers. One of Ariba's guiding principles in these discussions has been to "be flexible with each customer" in their upgrade plans. Have they been? It sounds like in most cases they have because there doesn't appear to be more than a dozen vocal customers voicing strong opposition. However, I know of some customers who feel they were being "forced" or "pressured" into a situation where they did not want to go based on milestone migration dates and penalties in maintenance agreements. When I told Jon this, he suggested that any customer who feels this way should escalate the issue past their account executive and that Ariba is committed to maintaining flexibility and being reasonable in their dealings. He also mentioned that upgrading could save customers money because new releases are easier to manage internally, require less hardware and third-party support and are better integrated with the rest of the Ariba suite.

So what gives in this situation? Ariba is clearly behaving like an enterprise software company, forcing the contractual hand of customers, as is their right. But it's clear that they're not always handling it in the best of ways (some lessons from the Dave Duffield soft hands school of customer management might be in order). Yet, it's also quite obvious that the higher you go in the organization at Ariba, the more they appear committed to being flexible and maintaining relationships at all costs. What does this mean for customers?

In my view, Ariba customers need to remember that they're in the driver's seat here (despite how some reps might be treating them). If you're upset with how Ariba is treating you over the sun-setting on support and contractual upgrade requirements, the best way to approach the situation is to escalate the issue at Ariba, having done your homework and developed alternatives -- that you're willing to go with -- and then head back to the negotiating table. Don't get upset. Play the game.

Ariba knows that if they lose too many customers, it won't look good on the street. They also don't want a bunch of former customers telling their new vendors who have replaced Ariba to call folks like me to highlight the off-Ariba migration success stories. Simply put, if Ariba knows you're upset or are considering options, they'll do even more to not let that happen. But as is the case in any vendor discussion / negotiation like this, you need to truly be ready to run out of the spend management door, yelling "¡Ándale! ¡Ándale! ¡Arriba! ¡Arriba!" to have them put their best negotiating foot forward. Don't worry. They will. And if you're among those who are upset, it's clear from my conversation with Jon that the higher-ups at your favorite Sunnyvale vendor want to hear directly from you.

- Jason Busch