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