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SAP Ariba and IBM’s New Partnership – An Executive Q&A

Ardent’s team met with the executives at SAP Ariba and IBM to discuss the new partnership in more detail. Below is a series of questions and answers that we believe will be helpful to the customers and prospects of both companies. You may also want to read our initial coverage of the announcement and my Instant Analysis of the SAP Ariba IBM Partnership.

There was discussion that the two teams would co-locate – Does that include any of the current Emptoris team (If so, will there be a move required for the current staff)?  or only the group that will be working on the Watson and Leonardo innovation?

IBM response: The co-location discussion refers to the new Cognitive Procurement hubs that we will launch together in a dedicated space, first on the west coast in Palo Alto, and then on the east coast, where we will have developers working on the new solutions. The co-located IBM team will include Watson engineers, data scientists, experts. The current Emptoris team will remain focused on ongoing maintenance and support for current customers (e.g. fix packs, security patches, modifications for new browsers, etc)and will not be part of co-location.

How many fully-dedicated resources are being committed from each side to work jointly on cognitive procurement as part of this partnership?

IBM response: IBM and SAP prohibit disclosure of information including number of resources, number of clients, financial information, etc.

From a product perspective, will the two companies jointly own the new technology offerings that will be released later this year?

IBM response: There are certain functions that IBM is developing for SAP Ariba and will become part of the new solutions on the SAP Ariba platfrom, and as such SAP will own that IP. In addition, IBM Global Business Services (GBS) will get an advantage as a preferred provider of the cognitive solutions for two reasons: first, IBM GBS will also create tools and assets incremental to those that will become part of the SAP Ariba product/s, and those will be owned by IBM GBS; second, the fact that we are jointly developing the IBM Watson integration and specific use cases give IBM GBS the best position to help guide clients on how to take advantage of such functionality.

Will Ariba pay IBM a licensing fee for these new solutions?

IBM response: IBM and SAP prohibit disclosure on fees, however both SAP and IBM are committing to each other with specific economics on each of the deliverables highlighted as part of the agreement.

Is there any exclusivity given to SAP-Ariba for any IBM Watson solutions?

IBM response: IBM Watson is an open platform and as such is not exclusive as anyone can use it. SAP Ariba will have an advantage because we are jointly building integrations between SAP Ariba and IBM Watson that will be part of the product and as such it makes it easier for SAP Ariba clients to benefit from IBM Watson capabilities.

How does SAP Leonardo fit into the plans?

SAP Ariba response: SAP Ariba is an open platform, and we work with many partners to deliver unique solutions that create value for anyone connected to the Ariba Network. We for instance, partnered with Thomson Reuters to deliver a tax integration service through which they can accurately and efficiently calculate and comply with global tax regulations for procurement and sales activities. In integrating the cognitive capabilities of Watson alongside other capabilities from SAP Leonardo into our solutions, we can empower buyers and sellers to make faster, smarter decisions and improve their business outcomes.

The expanded SAP Leonardo brand will combine Machine Learning, Internet of Things (IoT), blockchain, Analytics and Big Data on an open digital platform. This comprehensive Digital Innovation System will offer customers industry-specific services, called Industry Innovation Accelerators, for digital transformation with fixed prices and timelines. SAP will also integrate the capabilities of Leonardo into its core business applications so customers can use their existing SAP investments and share the benefits of these transformative capabilities at scale.

New developments across the Leonardo innovation portfolio include: a new machine learning platform and a set of new machine learning-enabled applications for corporate functions ranging from billing and resume matching to procurement and travel expense management; an SAP Cloud Platform Blockchain service to enable customers to provision Hyperledger nodes for development of blockchain scenarios that integrate with existing SAP business processes.

Did SAP-Ariba make a financial commitment as to the amount of fees that IBM Global Services will generate via this partnership?

IBM response: There is a commercial commitment from both companies to enter this partnership that includes, among others, commitments to each other’s business case.

Is IBM GBS the preferred services provider to manage Emptoris customer migrations to SAP-Ariba?

IBM response: Yes. IBM will work together with SAP Ariba to transition customers currently using IBM Emptoris to the SAP Ariba platform using tailored roadmaps that we will jointly develop to accommodate the client’s needs and accelerate their digital transformation. IBM will receive a royalty from SAP for those customers that move from Emptoris to SAP Ariba platform. IBM GBS also will have an advantage for new clients that want to leverage a joint roadmap and cognitive procurement capabilities.

Questions for/about current IBM-Emptoris customers:

Will the current development cycle be continued as it has been in the past, slowed, or stopped?

IBM response: IBM will provide standard maintenance to the Emptoris products (e.g. fix packs, security patches, modifications for new browsers, etc), but will not release new enhancements or roadmap updates.

Will IBM introduce any new IBM Watson innovation for current Emptoris users?

IBM response: No, there will be no new enhancements to Emptoris. Importantly, IBM intends to support current Emptoris SaaS customers for up to three years post announcement, and will support on premise Emptoris customers for five years from the date of release. For SaaS customers, this would translate to support through May 31, 2020. For on premise customers, those on version 10.0.x would be supported through December 31, 2019 and those on 10.1.x would be supported through December 31, 2020. These end of support dates will be finalized and published in June 2017. As stated previously, during this period, IBM will provide standard maintenance to the Emptoris products (e.g. fix packs, security patches, modifications for new browsers, etc), but will not release new enhancements or roadmap updates.

Understanding that the solutions will be supported for several years, will the partners be focused on accelerating the migration of customers to SAP-Ariba’s solutions?

IBM response (assuming “partners” refers to IBM and SAP Ariba): IBM will work together with SAP Ariba to bring new and existing customers, including those using IBM Bluefish solutions, to the SAP Ariba platform using tailored roadmaps, developed by IBM GBS that accommodate the client’s needs and accelerate digital transformation.

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