German business software firm SAP has entered into an agreement to acquire Ariba, a cloud-based business commerce network, for $4.3bn in a bid to expands its cloud based applications.
The acquisition is the latest move by SAP, as it ups its ante against its rival company Oracle, as the duo compete with Salesforce.com in fast growing cloud-computing services market.
In recent years, SAP has been agressively expanding into cloud computing market with string of acquisitions: it acquired business-to-business document and data exchange service Crossgate in September 2011 for an undisclosed sum, while it bought SuccessFactors, a provider of online tools for managing employees for $3.4bn in December this year.
Its biggest rival, Oracle is also on acquisition spree of cloud companies, which acquired Taleo for $1.9bn and RightNow for $1.5bn in recent past.
The acquisition will combine Ariba's buyer-seller collaboration network with SAP's customer base and business process to create new models for business-to-business collaboration in the cloud.
Together, SAP and Ariba can deliver an end-to-end application that enables companies to achieve a closed-loop from source-to-pay, regardless of whether they deploy in the cloud, on-premise or through a combination of both.
The Ariba network will benefit from the performance delivered by using SAP HANA, the company's flagship in-memory platform.
SAP's analytics and Ariba network's relationship and transaction information from commerce activity is combined to provide real-time insights to enable trading partners to discover, connect and collaborate.
The combination of the business network procurement applications from Ariba and SAP will enable organisations to gain commplete business intelligence.
SAP said the acquisition will enable all its customers to connect to the business network through pre-built integration points.
Following the acquistion it is planned to consolidate all cloud-related supplier assets of SAP under Ariba. The existing management team will continue to lead Ariba, which will operate as an independent business under the name 'Ariba, an SAP company.'