SAP buying Ariba with plans for a cloud super-network

SAP America is looking to develop "the business network of the future" with the acquisition of cloud-based business commerce network Ariba at the price of $45 per share. That rounds out to roughly approximately $4.3 billion.

Each party brings something significant to the table here. Ariba already has the buyer-seller collaboration network, which is intended to compliment SAP's existing customer base as well as its B2B solutions. Thus, this really gives SAP a big push in the cloud space.

SAP will also be bringing its own resources to boost Ariba. For example, SAP is integrating its flagship HANA in-memory platform to improve Ariba's network performance.

Based on the press release, the idea is really to build a comprehensive, one-stop business networking option 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."

Expected to close by the end of the third quarter of 2012, the merger will consolidate all of SAP's cloud-related assets under the Ariba umbrella.

Ariba is actually going to retain some level of independence as the company will retain its leadership team, and it will operate under the name "Ariba, an SAP company." Furthermore, current Ariba CEO Bob Calderoni will be nominated to the SAP Global Managing Board once the deal is done.

Update at 1:57 p.m.: During the conference call with analysts and investors this afternoon, SAP co-CEO Bill McDermott assured that this merger would "maintain the openness of the business network" while also offering business customers the option to connect to other companies on any other source systems provided by competitors such as Microsoft, NetSuite, and Oracle.

Calderoni concurred, emphasizing that the combination of SAP and Ariba "comes at time when a revolution is occurring in business" as enterprises are more dependent on working with external partners.

SAP co-CEO Jim Hagemann Snabe referred to the merger with Ariba as a "game-changing opportunity" because a fully-networked business environment that could be provided by these two players could eliminate guesswork, allowing customers to optimize the delivery of products and services to the right customers at the right time at the right price.

As SAP pushes its way further into the global cloud space, it's also expecting some big rewards. SAP executives predicted that the merger will produce approximately 2 billion euros ($2.6 billion at current exchange rates) in cloud revenue alone by 2015.

This story was first published as "SAP eyes creating cloud super network with Ariba acquisition" at ZDNet's Between the Lines.