ARIBA INC, S-8, 1999-10-15

ARIBA INC
S-8, 1999-10-15
PREPACKAGED SOFTWARE

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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 15, 1999
REGISTRATION NO.
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- --------------------------------------------------------------------------------

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------

FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------

ARIBA, INC.
(Exact name of registrant as specified in its charter)

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<S> <C> <C>
DELAWARE 7372 77-0439730
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of Classification Code Number) Identification
incorporation or organization) No.)
</TABLE>

1585 CHARLESTON ROAD
MOUNTAIN VIEW, CALIFORNIA 94043
(Address of principal executive offices) (Zip Code)
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ARIBA, INC.
1996 STOCK PLAN
SHARES ACQUIRED UNDER WRITTEN COMPENSATION AGREEMENTS WITH
CERTAIN NAMED AND UNNAMED INDIVIDUALS
(Full title of the Plans)
------------------------

KEITH J. KRACH
PRESIDENT AND CHIEF EXECUTIVE OFFICER
ARIBA, INC.
1585 CHARLESTON ROAD
MOUNTAIN VIEW, CALIFORNIA 94043
(Name and address of agent for service)
------------------------

408-543-3800
(Telephone number, including area code, of agent for service)
------------------------

CALCULATION OF REGISTRATION FEE

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PROPOSED
MAXIMUM PROPOSED MAXIMUM
TITLE OF AMOUNT TO OFFERING PRICE AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED BE REGISTERED(1) PER SHARE(2) OFFERING PRICE(2) REGISTRATION FEE
<S> <C> <C> <C> <C>
Shares Acquired Under Written Compensation
Agreements with Certain Named and Unnamed
Individuals
Common Stock (par value $0.002)............ 470,818 shares $167.875 $79,038,571.75 $21,972.72
</TABLE>

(1) This Registration Statement shall also cover any additional shares of Common
Stock which become issuable under the Written Compensation Agreements with
Certain Designated Individuals and Certain Unnamed Individuals, because of
any stock dividend, stock split, recapitalization or other similar
transaction effected without the receipt of consideration which results in
an increase in the number of the outstanding shares of Common Stock of
Ariba, Inc.

(2) Calculated only for purposes of this offering under Rule 457(h) of the
Securities Act of 1933, as amended, on the basis of the average of the high
and low prices per share of Common Stock of Ariba, Inc. on October 14, 1999.

EXPLANATORY NOTE

Ariba, Inc. has prepared this Registration Statement in accordance with the
requirements of Form S-8 under the Securities Act of 1933, as amended (the "1933
Act"), to register shares of its common stock, $0.002 par value per share. Under
cover of this Form S-8 is a Reoffer Prospectus Ariba, Inc. prepared in
accordance with Part I of Form S-3 under the 1933 Act. The Reoffer Prospectus
may be utilized for reofferings and resales of up to 470,818 shares of common
stock acquired by selling stockholders under the Ariba, Inc. 1996 Stock Plan.

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ARIBA, INC.
FORM S-8 CROSS REFERENCE SHEET SHOWING LOCATION OF INFORMATION
REQUIRED BY PART I OF FORM S-3

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<CAPTION>
FORM S-3 ITEM NUMBER LOCATION/HEADING IN PROSPECTUS
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<C> <S> <C>
1. Forepart of Registration Statement and Outside Front Cover page
Cover page of Prospectus

2. Inside Front and Outside Back Cover Page of Available Information; Incorporation of Certain
Prospectus Information by Reference

3. Summary Information, Risk Factors and Ratio of Risk Factors
Earnings to Fixed Charges

4. Use of Proceeds Use of Proceeds

5. Determination of Offering Price Not applicable

6. Dilution Not applicable

7. Selling Security Holder Registered Stockholders

8. Plan of Distribution Plan of Distribution

9. Description of Securities to be Registered Not Applicable

10. Interests of Named Experts and Counsel Not Applicable

11. Material Changes Not Applicable

12. Incorporation of Certain Information Documents Incorporated by Reference

13. Disclosure of Commission Position on Indemnification Indemnification
for Securities Act Liabilities
</TABLE>
<PAGE>
REOFFER PROSPECTUS

SHARES OF COMMON STOCK

ARIBA, INC.

---------------

This Reoffer Prospectus relates to 421,741 shares of the Common Stock, par
value $0.002 (the "Common Stock"), of Ariba, Inc. (the "Company"), which may be
offered from time to time by certain key employees and consultants named herein
and 49,077 shares of the Common Stock, of the Company, which may be offered from
time to time by certain employees and consultants who are not named herein who
are not affiliates pursuant to this Registration Statement (the "Registered
Stockholders"). It is anticipated that the Registered Stockholders will offer
shares for sale at prevailing prices on the Nasdaq National Market System on the
date of sale. The Company will receive no part of the proceeds of sale made
hereunder. All expenses of registration incurred in connection with this
offering are being borne by the Company, but all selling and other expenses
incurred by each of the Registered Stockholders will be borne by each such
Registered Stockholder.

The Common Stock is traded on the Nasdaq National Market System.

The Registered Stockholders and any broker executing selling orders on
behalf of the Registered Stockholders may be deemed to be "underwriters" within
the meaning of the Securities Act of 1933, as amended (the "Securities Act"), in
which event commissions received by such broker may be deemed to be underwriting
commissions under the Securities Act.

THESE SECURITIES INVOLVE A HIGH DEGREE OF RISK AND SHOULD BE CONSIDERED ONLY
BY PERSONS WHO CAN AFFORD THE LOSS OF THEIR ENTIRE INVESTMENT. SEE "RISK
FACTORS" BEGINNING ON PAGE 3.

---------------------

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

------------------------

NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS, OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, IN CONNECTION
WITH THE OFFERING DESCRIBED HEREIN, AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY
OR ANY REGISTERED STOCKHOLDER. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO
SELL, OR A SOLICITATION OF AN OFFER TO BUY, NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES BY ANY PERSON IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL FOR SUCH
PERSON TO MAKE SUCH OFFER, SOLICITATION OR SALE. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE AN
IMPLICATION THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME
SUBSEQUENT TO THE DATE HEREOF.

------------------------

THE DATE OF THIS PROSPECTUS IS OCTOBER 15, 1999.
<PAGE>
AVAILABLE INFORMATION

The Company will be subject to the informational reporting requirements of
the Securities Exchange Act of 1934, as amended (the "Exchange Act") upon the
first date on which its Common Stock is registered under Section 12(g) of the
Exchange Act and in accordance therewith will file reports, proxy statements and
other information with the Securities and Exchange Commission (the
"Commission"). Such reports, proxy statements and other information can be
inspected and copied at the Public Reference Room of the Commission, 450 Fifth
Street, N.W., Washington, D.C. 20549 and at the Commission's regional offices at
219 South Dearborn Street, Chicago, IL 60604; 26 Federal Plaza, New York, NY
10007; and 5757 Wilshire Boulevard, Los Angeles, CA 90036, at prescribed rates.
The Common Stock is quoted on the Nasdaq National Market System. Reports, proxy
statements, informational statements and other information concerning the
Company can be inspected at the offices of the National Association of
Securities Dealers, Inc. at 1735 K Street, N.W., Washington, D.C. 20006. The
commission also maintains a website (http://www.sec.gov) that contains reports,
proxy statements and other information regarding registrants that file
electronically with the commission.

The Company intends to furnish its stockholders with annual reports
containing additional financial statements and a report thereon by independent
certified public accountants.

A copy of any document incorporated by reference in the Registration
Statement (not including exhibits to the information that is incorporated by
reference unless such exhibits are specifically incorporated by reference into
the information that the Registration Statement incorporates) of which this
Reoffer Prospectus forms a part but which is not delivered with this Reoffer
Prospectus will be provided by the Company without charge to any person
(including any beneficial owner) to whom this Reoffer Prospectus has been
delivered upon the oral or written request of such person. Such requests should
be directed to Monica Volta, Ariba, Inc., 1585 Charleston Road, Mountain View,
CA 94043. The Company's telephone number at that location is (408) 543-3800.

2
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TABLE OF CONTENTS

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PAGE
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THE COMPANY............................................................... 4
RISK FACTORS.............................................................. 4
USE OF PROCEEDS........................................................... 16
REGISTERED STOCKHOLDERS................................................... 17
PLAN OF DISTRIBUTION...................................................... 18
DOCUMENTS INCORPORATED BY REFERENCE....................................... 18
INDEMNIFICATION........................................................... 19
</TABLE>

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THE COMPANY

Ariba, Inc. ("Ariba") is a leading provider of Internet-based
business-to-business electronic commerce solutions for operating resources.
Operating resources are the goods and services required to operate a company,
such as information technology and telecommunications equipment, professional
services, MRO (Maintenance, Repair and Operations) supplies, facilities and
office equipment, and expense items. Operating resources are often the largest
segment of corporate expenditures, representing approximately 33% of an average
company's revenues, according to Killen & Associates.

Today, most organizations buy operating resources through paper-based
processes that have remained largely unautomated by the information technology
advances of the last 30 years. With the recent widespread adoption of internal
computer networks based on the Internet protocol, or "intranets," and the
acceptance of the Internet as a business communications platform, organizations
can now automate enterprise-wide and inter-organizational commerce activities.
As a result, Internet-based business-to-business electronic commerce is expected
to grow rapidly from $43 billion in 1998 to $1.3 trillion in 2003, exceeding
business-to-consumer electronic commerce by a factor of nine to one in 2003,
according to Forrester Research. This market is expected to create a substantial
demand for intranet- and Internet-based commerce applications. According to
International Data Corporation, the worldwide market for Internet-based
electronic commerce procurement and order management applications will
experience tremendous growth, increasing from $187 million in 1998 to $8.5
billion in 2003.

Ariba is pioneering the use of the Internet to automate the procurement and
management of operating resources. Our Operating Resource Management System,
Ariba ORMS, enables organizations to automate the procurement cycle within their
intranets, lowering the costs associated with operating resources. Our recently
launched Ariba Network is a global business-to-business electronic commerce
network for operating resources that enables buyers and suppliers to automate
transactions on the Internet. Together, Ariba ORMS and the Ariba Network combine
intranet-based network applications with an Internet-based network to create a
business-to-business electronic commerce solution for operating resources that
benefits both buyers and suppliers. Since we began marketing Ariba ORMS in March
1997, it has been licensed by large, multinational industry leaders and public
sector organizations including Cisco Systems, Federal Express Corporation,
General Motors, Hewlett-Packard, MCI WorldCom, Philips, Merck & Co., and Visa.

Our objective is to create the leading Internet-based business-to-business
electronic commerce network for operating resources. Our strategy to achieve
this objective is to take advantage of the buying power of a large multinational
customer base to attract leading operating resource suppliers to our Ariba
Network. We believe a growing number of suppliers in our Ariba Network will in
turn draw more buyers to our network. We also believe this growth cycle will
help create a network effect, where the value to each participant in the network
increases with the addition of each new participant, increasing the overall
value of our Ariba solution.

The Company's executive offices are located at 1585 Charleston Road,
Mountain View, CA 94043. The Company's telephone number is (408) 543-3800.

RISK FACTORS

An investment in our common stock involves a high degree of risk. You should
carefully consider the following risk factors and the other information in this
prospectus before investing in our common stock. Our business, results of
operations and financial condition could be seriously harmed by any of the
following risks. The trading price of our common stock could decline due to any
of these risks, and you may lose all or part of any investment you make in our
common stock.

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RISKS RELATED TO OUR BUSINESS

ARIBA IS AN EARLY-STAGE COMPANY. OUR LIMITED OPERATING HISTORY MAKES IT
DIFFICULT TO EVALUATE OUR FUTURE PROSPECTS.

Ariba was founded in September 1996 and has a limited operating history. Our
limited operating history makes an evaluation of our future prospects very
difficult. We began shipping our first product, the Ariba Operating Resource
Management System, or Ariba ORMS, in June 1997 and began to operate the Ariba
Network in April 1999. We will encounter risks and difficulties frequently
encountered by early-stage companies in new and rapidly evolving markets. Many
of these risks are described in more detail in this "Risk Factors" section. We
may not successfully address any of these risks. If we do not successfully
address these risks, our business would be seriously harmed.

THE MARKET FOR OUR SOLUTIONS IS AT AN EARLY STAGE. WE NEED A CRITICAL MASS
OF LARGE BUYING ORGANIZATIONS AND THEIR SUPPLIERS TO IMPLEMENT OUR
SOLUTIONS.

The market for Internet-based operating resource applications and services
is at an early stage of development. Our success depends on a significant number
of large buying organizations implementing Ariba ORMS and linking with suppliers
over the Internet through the Ariba Network. The implementation of Ariba ORMS by
large buying organizations is complex, time consuming and expensive. In many
cases, these organizations must change established business practices and
conduct business in new ways. Our ability to attract additional customers for
our Ariba ORMS products will depend on using our existing customers as reference
accounts. As of June 30, 1999, only 39 customers had licensed our Ariba ORMS
solution. Accordingly, our operating resource solutions may not achieve
significant market acceptance. Unless a critical mass of large buying
organizations and their suppliers join the Ariba Network, our solutions may not
achieve widespread market acceptance and our business would be seriously harmed.

WE HAVE A HISTORY OF LOSSES AND EXPECT TO INCUR LOSSES IN THE FUTURE.

We incurred net losses of $4.7 million in fiscal 1997 and $11.0 million in
fiscal 1998. As of June 30, 1999, we had an accumulated deficit of approximately
$35.1 million. We expect to derive substantially all of our revenues for the
foreseeable future from licensing Ariba ORMS. Although these revenues have grown
in recent quarters, we may not be able to sustain these growth rates. In fact,
we may not have any revenue growth, and our revenues could decline. Over the
longer term, we expect to derive revenues from the Ariba Network, which is based
on an unproven business model. Moreover, we expect to incur significant sales
and marketing, research and development, and general and administrative
expenses. In the future, we expect to incur substantial non-cash costs relating
to the amortization of deferred compensation which will contribute to our net
losses. As of June 30, 1999, we had an aggregate of $29.3 million of deferred
compensation to be amortized. As a result, we expect to incur significant losses
for the foreseeable future.

OUR QUARTERLY OPERATING RESULTS ARE VOLATILE AND DIFFICULT TO PREDICT. IF WE
FAIL TO MEET THE EXPECTATIONS OF PUBLIC MARKET ANALYSTS OR INVESTORS, THE
MARKET PRICE OF OUR COMMON STOCK MAY DECREASE SIGNIFICANTLY.

Our quarterly operating results have varied significantly in the past and
will likely vary significantly in the future. We believe that period-to-period
comparisons of our results of operations are not meaningful and should not be
relied upon as indicators of future performance. Our operating results will
likely fall below the expectations of securities analysts or investors in some
future quarter or quarters. Our failure to meet these expectations would likely
adversely affect the market price of our common stock.

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Our quarterly operating results may vary depending on a number of factors,
including:

- Demand for both Ariba ORMS and the Ariba Network;

- Actions taken by our competitors, including new product introductions and
enhancements;

- Delays or reductions in spending for, or the implementation of,
application software by our potential customers as companies attempt to
stabilize their computer systems prior to January 1, 2000 in order to
reduce the risk of computer system problems associated with the Year 2000;

- Ability to scale our network and operations to support large numbers of
customers, suppliers and transactions;

- Ability to develop, introduce and market new products and enhancements to
our existing products on a timely basis;

- Changes in our pricing policies or those of our competitors;

- Ability to expand our sales and marketing operations, including hiring
additional sales personnel;

- Size and timing of sales of our products and services;

- Success in maintaining and enhancing existing relationships and developing
new relationships with strategic partners, including systems integrators
and other implementation partners;

- Compensation policies that compensate sales personnel based on achieving
annual quotas;

- Ability to control costs;

- Technological changes in our markets;

- Deferrals of customer orders in anticipation of product enhancements or
new products;

- Customer budget cycles and changes in these budget cycles; and

- General economic factors.

Our quarterly revenues are especially subject to fluctuation because they
depend on the sale of a small number of relatively large orders for our Ariba
ORMS products and related services. As a result, our quarterly operating results
may fluctuate significantly if we are unable to complete one or more substantial
sales in any given quarter. In many cases, we recognize revenues from product
sales on a percentage of completion basis. Accordingly, our ability to recognize
these revenues is subject to delays associated with our customers' ability to
complete the implementation of Ariba ORMS in a timely manner. In some cases, we
recognize revenues on a subscription basis over the life of the subscriptions
specified in the contract, which is typically 12 to 24 months. Therefore, if we
do not book a sufficient number of large orders in a particular quarter, our
revenues in future periods could be lower than expected. We have not fully
developed our business model for the Ariba Network. As this business model
evolves, the potential for fluctuations in our quarterly results could increase.
Furthermore, our quarterly revenues may be affected significantly by other
revenue recognition policies and procedures. These policies and procedures may
evolve or change over time based on applicable accounting standards and how
these standards are interpreted.

We plan to increase our operating expenses to expand our sales and marketing
operations, fund greater levels of research and development, develop new
partnerships, make tenant improvements to our new facilities, increase our
professional services and support capabilities and improve our operational and
financial systems. If our revenues do not increase along with these expenses,
our business, operating results and financial condition could be seriously
harmed and net losses in a given quarter could be even larger than expected.

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In addition, because our expense levels are relatively fixed in the near
term and are based in part on expectations of our future revenues, any decline
in our revenues to a level that is below our expectations would have a
disproportionately adverse impact on our operating results.

WE EXPECT THAT OUR ARIBA ORMS SOLUTIONS WILL CONTINUE TO PROVIDE
SUBSTANTIALLY ALL OF OUR REVENUES FOR THE FORESEEABLE FUTURE.

Our Ariba ORMS products and related services accounted for all of our
revenues in fiscal 1998 and for the nine months ended June 30, 1999. We
anticipate that revenues from our Ariba ORMS products and related services will
continue to constitute substantially all of our revenues for the foreseeable
future. Consequently, a decline in the price of, or demand for, our Ariba ORMS
solution, or its failure to achieve broad market acceptance, would seriously
harm our business.

IMPLEMENTATION OF OUR ARIBA ORMS SOLUTION BY LARGE CUSTOMERS IS COMPLEX,
TIME CONSUMING AND EXPENSIVE. WE FREQUENTLY EXPERIENCE LONG SALES AND
IMPLEMENTATION CYCLES.

Ariba ORMS is an enterprise-wide solution that must be deployed with many
users within a buying organization. Its implementation by large buying
organizations is complex, time consuming and expensive. In many cases, our
customers must change established business practices and conduct business in new
ways. In addition, they must generally consider a wide range of other issues
before committing to purchase our product, including product benefits, ease of
installation, ability to work with existing computer systems, ability to support
a larger user base, functionality and reliability. Furthermore, because we are
one of the first companies to offer an Internet-based operating resource
management system, many customers will be addressing these issues for the first
time in the context of managing and procuring operating resources. As a result,
we must educate potential customers on the use and benefits of our products and
services. In addition, we believe that the purchase of our products is often
discretionary and generally involves a significant commitment of capital and
other resources by a customer. It frequently takes several months to finalize a
sale and requires approval at a number of management levels within the customer
organization. The implementation and deployment of our products requires a
significant commitment of resources by our customers and third-party and/or our
professional services organizations. Because we target large customers, our
sales cycles range from four to 24 months and average approximately nine months.

BUSINESS-TO-BUSINESS ELECTRONIC COMMERCE PURCHASING NETWORKS, INCLUDING THE
ARIBA NETWORK ARE AT AN EARLY STAGE OF DEVELOPMENT AND MARKET ACCEPTANCE

We began operating the Ariba Network in April 1999. Broad and timely
acceptance of the Ariba Network, which is critical to our future success, is
subject to a number of significant risks. These risks include:

- Operating resource management and procurement on the Internet is a new
market;

- Our network's ability to support large numbers of buyers and suppliers is
unproven;

- Our need to enhance the interface between our Ariba ORMS product and the
Ariba Network;

- Our need to significantly enhance the features and services of the Ariba
Network to achieve widespread commercial acceptance of our network; and

- Our need to significantly expand our internal resources to support planned
growth of the Ariba Network.

Although we expect to derive a significant portion of our long-term future
revenue from the Ariba Network, we have not yet established our pricing and
revenue model for the services associated with the Ariba Network. If we are
unable to establish a pricing and revenue model acceptable to our customers, the
Ariba Network may not be commercially successful. This would seriously harm our

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business, particularly if we experience a decline in the growth or growth rate
of revenues from our Ariba ORMS solution.

WE WILL RELY ON THIRD PARTIES TO EXPAND, MANAGE AND MAINTAIN THE COMPUTER
AND COMMUNICATIONS EQUIPMENT AND SOFTWARE NEEDED FOR THE DAY-TO-DAY
OPERATIONS OF THE ARIBA NETWORK.

We will rely on several third parties to provide hardware, software and
services required to expand, manage and maintain the computer and communications
equipment and software needed for the day-to-day operations of the Ariba
Network. Services provided by these parties will include managing the Ariba
Network web server, maintaining communications lines and managing network data
centers, which are the locations on our network where data is stored. If we are
unable to contract successfully with third parties for these services, we would
have to perform them ourselves. We may not successfully obtain or perform these
services on a timely and cost effective basis. Since the installation of the
computer and communications equipment and software needed for the day-to-day
operations of the Ariba Network to a significant extent will be managed by third
parties, we will be dependent on those parties to the extent that they manage,
maintain and provide security for it.

THE BUSINESS-TO-BUSINESS ELECTRONIC COMMERCE INDUSTRY IS VERY COMPETITIVE
AND WE FACE INTENSE COMPETITION FROM MANY PARTICIPANTS IN THIS INDUSTRY. IF
WE ARE UNABLE TO COMPETE SUCCESSFULLY, OUR BUSINESS WILL BE SERIOUSLY
HARMED.

The market for our solution is intensely competitive, evolving and subject
to rapid technological change. We expect the intensity of competition to
increase in the future. Increased competition is likely to result in price
reductions, reduced gross margins and loss of market share, any one of which
could seriously harm our business. Competitors vary in size and in the scope and
breadth of the products and services offered. We primarily encounter competition
with respect to different aspects of our solution from Captura Software, Clarus,
Commerce One, Concur Technologies, Extensity, GE Information Services,
Intellysis, Netscape Communications and TRADE'ex Electronic Commerce Systems. We
also encounter competition from several major enterprise software developers,
such as Oracle, PeopleSoft and SAP. In addition, because there are relatively
low barriers to entry in the operating resource management software market, we
expect additional competition from other established and emerging companies, as
the operational resource management software market continues to develop and
expand. For example, third parties that currently help implement Ariba ORMS
could begin to market products and services that compete with our own. We could
also face competition from new companies who introduce an Internet-based
operating resource management solution.

Many of our current and potential competitors have longer operating
histories, significantly greater financial, technical, marketing and other
resources than us, significantly greater name recognition and a larger installed
base of customers. In addition, many of our competitors have well-established
relationships with our current and potential customers and have extensive
knowledge of our industry. In the past, we have lost potential customers to
competitors for various reasons. In addition, current and potential competitors
have established or may establish cooperative relationships among themselves or
with third parties to increase the ability of their products to address customer
needs. Accordingly, it is possible that new competitors or alliances among
competitors may emerge and rapidly acquire significant market share. We also
expect that competition will increase as a result of industry consolidations.

We may not be able to compete successfully against our current and future
competitors.

WE EXPECT REVENUES FROM ARIBA ORMS TO BE CONCENTRATED IN A RELATIVELY SMALL
NUMBER OF CUSTOMERS.

In fiscal 1998, five customers accounted for more than 10% of our total
revenues and, in the nine months ended June 30, 1999, one customer accounted for
more than 10% of our total revenues. We

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may continue to derive a significant portion of our revenues from a relatively
small number of customers in the future.

WE RELY ON THIRD PARTIES TO IMPLEMENT ARIBA ORMS.

We rely, and expect to rely increasingly, on a number of third parties to
implement Ariba ORMS at customer sites. If we are unable to establish and
maintain effective, long-term relationships with our implementation providers,
or if these providers do not meet the needs or expectations of our customers,
our business would be seriously harmed. This strategy will also require that we
develop new relationships with additional third-party implementation providers
to provide these services if the number of Ariba ORMS implementations continues
to increase. Our current implementation partners are not contractually required
to continue to help implement Ariba ORMS. As a result of the limited resources
and capacities of many third-party implementation providers, we may be unable to
establish or maintain relationships with third parties having sufficient
resources to provide the necessary implementation services to support our needs.
If these resources are unavailable, we will be required to provide these
services internally, which would significantly limit our ability to meet our
customers' implementation needs. A number of our competitors, including Oracle,
SAP and PeopleSoft, have significantly more well-established relationships with
these third parties and, as a result, these third parties may be more likely to
recommend competitors' products and services rather than our own. In addition,
we cannot control the level and quality of service provided by our current and
future implementation partners.

WE DEPEND ON SUPPLIERS FOR THE SUCCESS OF THE ARIBA NETWORK.

We expect to depend on suppliers joining the Ariba Network. Any failure of
suppliers to join the Ariba Network in sufficient and increasing numbers would
make our network less attractive to buyers and consequently other suppliers. In
order to provide buyers on the Ariba Network an organized method for accessing
operating resources, we rely on suppliers to maintain web-based catalogs,
indexing services and other content aggregation tools. Our inability to access
and index these catalogs and services would result in our customers having fewer
products and services available to them through our solution, which would
adversely affect the perceived usefulness of the Ariba Network.

WE DEPEND ON THE INTRODUCTION OF NEW VERSIONS OF ARIBA ORMS AND ON ENHANCING
THE FUNCTIONALITY AND SERVICES OFFERED BY THE ARIBA NETWORK.

If we are unable to develop new software products or enhancements to our
existing products on a timely and cost-effective basis, or if new products or
enhancements do not achieve market acceptance, our business would be seriously
harmed. The life cycles of our products are difficult to predict because the
market for our products is new and emerging, and is characterized by rapid
technological change, changing customer needs and evolving industry standards.
The introduction of products employing new technologies and emerging industry
standards could render our existing products or services obsolete and
unmarketable.

To be successful, our products and services must keep pace with
technological developments and emerging industry standards, address the
ever-changing and increasingly sophisticated needs of our customers and achieve
market acceptance.

In developing new products and services, we may:

- Fail to develop and market products that respond to technological changes
or evolving industry standards in a timely or cost-effective manner;

- Encounter products, capabilities or technologies developed by others that
render our products and services obsolete or noncompetitive or that
shorten the life cycles of our existing products and services;

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- Experience difficulties that could delay or prevent the successful
development, introduction and marketing of these new products and
services; or

- Fail to develop new products and services that adequately meet the
requirements of the marketplace or achieve market acceptance.

IF WE FAIL TO RELEASE OUR PRODUCTS IN A TIMELY MANNER, OR IF OUR PRODUCTS DO
NOT ACHIEVE MARKET ACCEPTANCE, OUR BUSINESS WOULD BE SERIOUSLY HARMED.

We may fail to introduce or deliver new potential offerings on a timely
basis or at all. In the past, we have experienced delays in the commencement of
commercial shipments of our new releases. If new releases or potential new
products are delayed or do not achieve market acceptance, we could experience a
delay or loss of revenues and customer dissatisfaction. Customers may delay
purchases of Ariba ORMS in anticipation of future releases. If customers defer
material orders of Ariba ORMS in anticipation of new releases or new product
introductions, our business would be seriously harmed.

NEW VERSIONS AND RELEASES OF ARIBA ORMS MAY CONTAIN ERRORS OR DEFECTS.

Ariba ORMS is complex and, accordingly, may contain undetected errors or
failures when first introduced or as new versions are released. This may result
in loss of, or delay in, market acceptance of our products. We have in the past
discovered software errors in our new releases and new products after their
introduction. In the past, we discovered problems with respect to the ability of
software written in Java to scale to allow for large numbers of concurrent users
of Ariba ORMS. We have experienced delays in release, lost revenues and customer
frustration during the period required to correct these errors. We may in the
future discover errors, including Year 2000 errors and additional scalability
limitations, in new releases or new products after the commencement of
commercial shipments. In addition, a delay in the commercial release of the next
version of Ariba ORMS could also slow the growth of the Ariba Network.

WE COULD BE SUBJECT TO POTENTIAL PRODUCT LIABILITY CLAIMS AND THIRD PARTY
LIABILITY CLAIMS RELATED TO PRODUCTS AND SERVICES PURCHASED THROUGH THE
ARIBA NETWORK.

Our customers use our products and services to manage their operating
resources. Any errors, defects or other performance problems could result in
financial or other damages to our customers. A product liability claim brought
against us, even if not successful, would likely be time consuming and costly
and could seriously harm our business. Although our customer license agreements
typically contain provisions designed to limit our exposure to product liability
claims, existing or future laws or unfavorable judicial decisions could negate
these limitation of liability provisions.

We plan to have the Ariba Network provide our customers with indices of
products that can be purchased from suppliers participating in the Ariba
Network. The law relating to the liability of providers of listings of products
and services sold over the Internet for errors, defects or other performance
problems with respect to those products and services is currently unsettled. We
will not pre-screen the types of products and services that may be purchased
through the Ariba Network. Some of these products and services could contain
performance or other problems. We may not successfully avoid civil or criminal
liability for problems related to the products and services sold through the
Ariba Network. Any claims or litigation could still require expenditures in
terms of management time and other resources to defend ourselves. Liability of
this sort could require us to implement measures to reduce our exposure to this
liability, which may require us, among other things, to expend substantial
resources or to discontinue certain product or service offerings or to take
precautions to ensure that certain products and services are not available
through the Ariba Network.

10
<PAGE>
OUR SUCCESS DEPENDS ON RETAINING OUR CURRENT KEY PERSONNEL AND ATTRACTING
ADDITIONAL KEY PERSONNEL, PARTICULARLY IN THE AREAS OF DIRECT SALES AND
RESEARCH AND DEVELOPMENT.

Our future performance depends on the continued service of our senior
management, product development and sales personnel, in particular Keith Krach,
our President and Chief Executive Officer. None of these persons, including Mr.
Krach, is bound by an employment agreement, and we do not carry key person life
insurance. The loss of the services of one or more of our key personnel could
seriously harm our business. Our future success also depends on our continuing
ability to attract, hire, train and retain a substantial number of highly
skilled managerial, technical, sales, marketing and customer support personnel.
We are particularly dependent on hiring additional personnel to increase our
direct sales and research and development organizations. In addition, new hires
frequently require extensive training before they achieve desired levels of
productivity. Competition for qualified personnel is intense, and we may fail to
retain our key employees or to attract or retain other highly qualified
personnel.

IF THE PROTECTION OF OUR INTELLECTUAL PROPERTY IS INADEQUATE, OUR
COMPETITORS MAY GAIN ACCESS TO OUR TECHNOLOGY, AND WE MAY LOSE CUSTOMERS.

We depend on our ability to develop and maintain the proprietary aspects of
our technology. To protect our proprietary technology, we rely primarily on a
combination of contractual provisions, confidentiality procedures, trade
secrets, and patent, copyright and trademark laws.

We license rather than sell Ariba ORMS and require our customers to enter
into license agreements, which impose restrictions on their ability to utilize
the software. In addition, we seek to avoid disclosure of our trade secrets
through a number of means, including but not limited to, requiring those persons
with access to our proprietary information to execute confidentiality agreements
with us and restricting access to our source code. We seek to protect our
software, documentation and other written materials under trade secret and
copyright laws, which afford only limited protection. We cannot assure you that
any of our proprietary rights with respect to the Ariba Network will be viable
or of value in the future because the validity, enforceability and type of
protection of proprietary rights in Internet-related industries are uncertain
and still evolving.

We have no patents, and none may be issued from our existing patent
application. Our future patents, if any, may be successfully challenged or may
not provide us with any competitive advantages. We may not develop proprietary
products or technologies that are patentable.

Despite our efforts to protect our proprietary rights, unauthorized parties
may attempt to copy aspects of our products or to obtain and use information
that we regard as proprietary. Policing unauthorized use of our products is
difficult, and while we are unable to determine the extent to which piracy of
our software products exists, software piracy can be expected to be a persistent
problem. In addition, the laws of some foreign countries do not protect our
proprietary rights to as great an extent as do the laws of the United States.
Our means of protecting our proprietary rights may not be adequate and our
competitors may independently develop similar technology, duplicate our products
or design around patents issued to us or our other intellectual property.

There has been a substantial amount of litigation in the software industry
and the Internet industry regarding intellectual property rights. It is possible
that in the future, third parties may claim that we or our current or potential
future products infringe their intellectual property. We expect that software
product developers and providers of electronic commerce solutions will
increasingly be subject to infringement claims as the number of products and
competitors in our industry segment grows and the functionality of products in
different industry segments overlaps. Any claims, with or without merit, could
be time-consuming, result in costly litigation, cause product shipment delays or
require us to enter into royalty or licensing agreements. Royalty or licensing
agreements, if required, may not be available on terms acceptable to us or at
all, which could seriously harm our business.

11
<PAGE>
We must now, and may in the future have to, license or otherwise obtain
access to intellectual property of third parties. For example, we are currently
dependent on developers' licenses from enterprise resource planning, database,
human resource and other system software vendors in order to ensure compliance
of our Ariba ORMS products with their management systems. We may not be able to
obtain any required third party intellectual property in the future.

IN ORDER TO MANAGE OUR GROWTH AND EXPANSION, WE WILL NEED TO IMPROVE AND
IMPLEMENT NEW SYSTEMS, PROCEDURES AND CONTROLS.

We have recently experienced a period of significant expansion of our
operations that has placed a significant strain upon our management systems and
resources. If we are unable to manage our growth and expansion, our business
will be seriously harmed. In addition, we have recently hired a significant
number of employees and plan to further increase our total headcount. We also
plan to expand the geographic scope of our customer base and operations. This
expansion has resulted and will continue to result in substantial demands on our
management resources. Our ability to compete effectively and to manage future
expansion of our operations, if any, will require us to continue to improve our
financial and management controls, reporting systems and procedures on a timely
basis, and expand, train and manage our employee work force. We are currently
implementing new systems to manage our financial and human resources
infrastructure. We may encounter difficulties in transitioning to the new
enterprise resource planning software system. Even after we implement this
system, our personnel, systems, procedures and controls may be inadequate to
support our future operations.

OUR BUSINESS COULD BE ADVERSELY AFFECTED IF THE SYSTEMS WE USE ARE NOT YEAR
2000 COMPLIANT OR IF OUR CUSTOMERS OR POTENTIAL CUSTOMERS ALTER THEIR
PURCHASING PATTERNS AS A RESULT OF THE YEAR 2000 PROBLEM.

The risks posed by Year 2000 issues could adversely affect our business in a
number of significant ways. Although we believe that our internally developed
systems and technology are Year 2000 compliant, our information technology
systems nevertheless could be substantially impaired or cease to operate due to
Year 2000 problems. Additionally, we rely on information technology supplied by
third parties, and our participating sellers also are heavily dependent on
information technology systems and on their own third-party vendor systems. Year
2000 problems experienced by us or any of these third parties could materially
adversely affect our business. Additionally, the Internet could face serious
disruptions arising from the Year 2000 problem.

Many of our customers and potential customers have implemented policies that
prohibit or strongly discourage making changes or additions to their internal
computer systems until after January 1, 2000. We will experience fewer sales if
potential customers who might otherwise purchase our Ariba ORMS product delay
the purchase and implementation of Ariba ORMS until after January 1, 2000 in an
effort to stabilize their internal computer systems in order to cope with the
Year 2000 problem or because their information technology budgets have been
diverted to address Year 2000 issues. If our potential customers delay
purchasing or implementing Ariba ORMS in preparation for the Year 2000 problem,
our business would be seriously harmed. In addition, because the revenues from
some of our customers are recognized on a percentage of completion basis, any
implementation delays by these customers caused by their needs to address Year
2000 issues will defer our ability to recognize this revenue.

We cannot guarantee that any of our participating sellers or other Internet
vendors will be Year 2000 compliant in a timely manner, or that there will not
be significant interoperability problems among information technology systems.
We also cannot guarantee that buyers and suppliers will be able to utilize the
Ariba Network without serious disruptions arising from the Year 2000 problem.
Given the pervasive nature of the Year 2000 problem, we cannot guarantee that
disruptions in other industries and market segments will not adversely affect
our business. Moreover, the costs related to Year 2000

12
<PAGE>
compliance, which thus far have not been material, could ultimately be
significant. In the event that we experience disruptions as a result of the Year
2000 problem, our business could be seriously harmed.

IF WE EXPAND OUR INTERNATIONAL SALES AND MARKETING ACTIVITIES, OUR BUSINESS
WILL BE SUSCEPTIBLE TO NUMEROUS RISKS ASSOCIATED WITH INTERNATIONAL
OPERATIONS.

To be successful, we believe we must expand our international operations and
hire additional international personnel. Therefore, we expect to commit
significant resources to expand our international sales and marketing
activities. If successful, we will be subject to a number of risks associated
with international business activities. These risks generally include:

- Currency exchange rate fluctuations;

- Seasonal fluctuations in purchasing patterns;

- Unexpected changes in regulatory requirements;

- Tariffs, export controls and other trade barriers;

- Longer accounts receivable payment cycles and difficulties in collecting
accounts receivable;

- Difficulties in managing and staffing international operations;

- Potentially adverse tax consequences, including restrictions on the
repatriation of earnings;

- The burdens of complying with a wide variety of foreign laws;

- The risks related to the recent global economic turbulence and adverse
economic circumstances in Asia; and

- Political instability.

WE MAY NEED TO MAKE ACQUISITIONS IN ORDER TO REMAIN COMPETITIVE IN OUR
MARKET. OUR BUSINESS COULD BE ADVERSELY AFFECTED AS A RESULT OF ANY OF THESE
FUTURE ACQUISITIONS.

In order to remain competitive, we may find it necessary to acquire
additional businesses, products or technologies. If we identify an appropriate
acquisition candidate, we may not be able to negotiate the terms of the
acquisition successfully, finance the acquisition, or integrate the acquired
business, products or technologies into our existing business and operations.
Further, completing a potential acquisition and integrating an acquired business
will cause significant diversions of management time and resources. If we
consummate one or more significant acquisitions in which the consideration
consists of stock or other securities, our equity could be significantly
diluted. If we were to proceed with one or more significant acquisitions in
which the consideration included cash, we could be required to use a substantial
portion of our available cash, to consummate any acquisition. Acquisition
financing may not be available on favorable terms, or at all. In addition, we
may be required to amortize significant amounts of goodwill and other intangible
assets in connection with future acquisitions, which would seriously harm our
business.

IN THE FUTURE WE MAY NEED TO RAISE ADDITIONAL CAPITAL IN ORDER TO REMAIN
COMPETITIVE IN THE BUSINESS-TO-BUSINESS ELECTRONIC COMMERCE INDUSTRY. THIS
CAPITAL MAY NOT BE AVAILABLE ON ACCEPTABLE TERMS, IF AT ALL.

We expect that the net proceeds from our initial public stock offering will
be sufficient to meet our working capital and capital expenditure needs for at
least the next 12 months. After that, we may need to raise additional funds and
we cannot be certain that we will be able to obtain additional financing on
favorable terms, if at all. If we cannot raise funds on acceptable terms, if and
when needed, we may not be able to develop or enhance our products and services,
take advantage of future opportunities, grow our business or respond to
competitive pressures or unanticipated requirements, which could seriously harm
our business.

13
<PAGE>
OUR STOCK PRICE IS VOLATILE

The market price of the common stock may decrease significantly in response
to the following factors, some of which are beyond our control:

- Variations in our quarterly operating results;

- Changes in securities analysts' estimates of our financial performance;

- Announcements that our revenue or income are below analysts' expectations;

- Changes in analysts' estimates of our performance or industry performance;

- Changes in market valuations of similar companies;

- Sales of large blocks of our common stock;

- The termination on October 21, 1999 or earlier of the "lock up" period
during which Ariba's principal stockholders, directors, officers and other
employees are not permitted to sell Ariba common stock they have acquired;

- Announcements by us or our competitors of significant contracts,
acquisitions, strategic partnerships, joint ventures or capital
commitments;

- Loss of a major customer or failure to complete significant license
transactions;

- Additions or departures of key personnel; and

- Fluctuations in stock market price and volume, which are particularly
common among highly volatile securities of software and Internet-based
companies.

WE ARE AT RISK OF SECURITIES CLASS ACTION LITIGATION DUE TO OUR EXPECTED
STOCK PRICE VOLATILITY.

In the past, securities class action litigation has often been brought
against a company following periods of volatility in the market price of its
securities. We may in the future be the target of similar litigation. Securities
litigation could result in substantial costs and divert management's attention
and resources, which could seriously harm our business.

OUR STOCK PRICE COULD BE AFFECTED BY SHARES OF OUR COMMON STOCK BECOMING
AVAILABLE FOR SALE IN THE FUTURE.

Approximately 32,817,122 shares of our common stock will be eligible for
sale for the first time in the public market on October 22, 1999, subject to
Rule 144 where applicable. Sales of a substantial number of shares of common
stock in the public market could depress the market price of our common stock
and could impair our ability to raise capital through the sale of additional
equity securities.

WE HAVE IMPLEMENTED CERTAIN ANTI-TAKEOVER PROVISIONS THAT COULD MAKE IT MORE
DIFFICULT FOR A THIRD PARTY TO ACQUIRE US.

Provisions of our amended and restated certificate of incorporation and
bylaws, as well as provisions of Delaware law, could make it more difficult for
a third party to acquire us, even if doing so would be beneficial to our
stockholders.

OUR EXISTING EXECUTIVE OFFICERS, DIRECTORS AND PRINCIPAL STOCKHOLDERS
CONTROL ARIBA AND COULD LIMIT THE ABILITY OF OUR OTHER STOCKHOLDERS TO
INFLUENCE THE OUTCOME OF DIRECTOR ELECTIONS AND OTHER TRANSACTIONS SUBMITTED
FOR A VOTE OF OUR STOCKHOLDERS.

As of October 12, 1999 our executive officers, directors and principal
stockholders beneficially own, in the aggregate, approximately 56% of our
outstanding common stock. As a result, these

14
<PAGE>
stockholders will be able to exercise control over all matters requiring
stockholder approval, including the election of directors and approval of
significant corporate transactions which could have the effect of delaying or
preventing a third party from acquiring control over us.

RISKS RELATED TO THE INTERNET INDUSTRY

WE DEPEND ON INCREASING USE OF THE INTERNET AND ON THE GROWTH OF ELECTRONIC
COMMERCE. IF THE USE OF THE INTERNET AND ELECTRONIC COMMERCE DO NOT GROW AS
ANTICIPATED, OUR BUSINESS WILL BE SERIOUSLY HARMED.

The Ariba Network depends on the increased acceptance and use of the
Internet as a medium of commerce. Rapid growth in the use of the Internet is a
recent phenomenon. As a result, acceptance and use may not continue to develop
at historical rates and a sufficiently broad base of business customers may not
adopt or continue to use the Internet as a medium of commerce. Demand and market
acceptance for recently introduced services and products over the Internet are
subject to a high level of uncertainty, and there exist few proven services and
products.

Our business would be seriously harmed if:

- Use of the Internet and other online services does not continue to
increase or increases more slowly than expected;

- The technology underlying the Internet and other online services does not
effectively support any expansion that may occur; or

- The Internet and other online services do not create a viable commercial
marketplace, inhibiting the development of electronic commerce and
reducing the need for our products and services.

WE DEPEND ON THE ACCEPTANCE OF THE INTERNET AS A COMMERCIAL MARKETPLACE AND
THIS ACCEPTANCE MAY NOT OCCUR ON A TIMELY BASIS.

The Internet may not be accepted as a viable long-term commercial
marketplace for a number of reasons. These include:

- Potentially inadequate development of the necessary communication and
computer network technology, particularly if rapid growth of the Internet
continues;

- Delayed development of enabling technologies and performance improvements;

- Delays in the development or adoption of new standards and protocols; and

- Increased governmental regulation.

SECURITY RISKS AND CONCERNS MAY DETER THE USE OF THE INTERNET FOR CONDUCTING
ELECTRONIC COMMERCE.

A significant barrier to electronic commerce and communications is the
secure transmission of confidential information over public networks. Advances
in computer capabilities, new discoveries in the field of cryptography or other
events or developments could result in compromises or breaches of our security
systems or those of other web sites to protect proprietary information. If any
well-publicized compromises of security were to occur, it could have the effect
of substantially reducing the use of the web for commerce and communications.
Anyone who circumvents our security measures could misappropriate proprietary
information or cause interruptions in our services or operations. The Internet
is a public network, and data is sent over this network from many sources. In
the past, computer viruses, software programs that disable or impair computers,
have been distributed and have rapidly spread over the Internet. Computer
viruses could be introduced into our systems or those of our customers or
suppliers, which could disrupt the Ariba Network or make it inaccessible to
customers or suppliers. We may be required to expend significant capital and
other resources to protect against

15
<PAGE>
the threat of security breaches or to alleviate problems caused by breaches. To
the extent that our activities may involve the storage and transmission of
proprietary information, such as credit card numbers, security breaches, could
expose us to a risk of loss or litigation and possible liability. Our security
measures may be inadequate to prevent security breaches, and our business would
be harmed if we do not prevent them.

THE ARIBA NETWORK MAY EXPERIENCE PERFORMANCE PROBLEMS OR DELAYS AS A RESULT
OF HIGH VOLUMES OF TRAFFIC.

The Ariba Network is currently operating on a limited basis. If the volume
of traffic on the web site for the Ariba Network increases, the Ariba Network
may in the future experience slower response times or other problems. In
addition, users will depend on Internet service providers, telecommunications
companies and the efficient operation of their computer networks and other
computer equipment for access to the Ariba Network. Each of these has
experienced significant outages in the past and could experience outages, delays
and other difficulties due to system failures unrelated to our systems. Any
delays in response time or performance problems could cause users of the Ariba
Network to perceive this service as not functioning properly and therefore cause
them to use other methods to procure their operating resources.

INCREASING GOVERNMENT REGULATION COULD LIMIT THE MARKET FOR, OR IMPOSE SALES
AND OTHER TAXES ON THE SALE OF, OUR PRODUCTS AND SERVICES OR ON PRODUCTS AND
SERVICES PURCHASED THROUGH THE ARIBA NETWORK.

As Internet commerce evolves, we expect that federal, state or foreign
agencies will adopt regulations covering issues such as user privacy, pricing,
content and quality of products and services. It is possible that legislation
could expose companies involved in electronic commerce to liability, which could
limit the growth of electronic commerce generally. Legislation could dampen the
growth in Internet usage and decrease its acceptance as a communications and
commercial medium. If enacted, these laws, rules or regulations could limit the
market for our products and services.

We do not collect sales or other similar taxes in respect of goods and
services purchased through the Ariba Network. However, one or more states may
seek to impose sales tax collection obligations on out-of-state companies like
us that engage in or facilitate electronic commerce. A number of proposals have
been made at the state and local level that would impose additional taxes on the
sale of goods and services over the Internet. These proposals, if adopted, could
substantially impair the growth of electronic commerce and could adversely
affect our opportunity to derive financial benefit from such activities.
Moreover, a successful assertion by one or more states or any foreign country
that we should collect sales or other taxes on the exchange of goods and
services through the Ariba Network could seriously harm our business.

Legislation limiting the ability of the states to impose taxes on
Internet-based transactions has been proposed in the U.S. Congress. This
legislation could ultimately be enacted into law or this legislation could
contain a limited time period in which this tax moratorium will apply. In the
event that the tax moratorium is imposed for a limited time period, legislation
could be renewed at the end of this period. Failure to enact or renew this
legislation could allow various states to impose taxes on electronic commerce,
and the imposition of these taxes could seriously harm our business.

USE OF PROCEEDS

The Company will not receive any of the proceeds from the offering
hereunder. All expenses of registration incurred in connection with this
offering are being borne by the Company, but all selling and other expenses
incurred by the individual Registered Stockholders will be borne by such
Registered Stockholders.

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<PAGE>
REGISTERED STOCKHOLDERS

The Reoffer Prospectus relates to shares of Common Stock which have been
acquired by certain key employees and consultants (the "Registered
Stockholders") of the Company. Registered Stockholders acquired shares of Common
Stock to be offered hereunder pursuant to the exercise of options or stock
purchase rights granted under the 1996 Stock Plan.

The following table sets forth certain information with respect to the
Registered Stockholders as of October 15, 1999:

<TABLE>
<CAPTION>
NUMBER OF
SHARES TO BE
OFFERED
REGISTERED STOCKHOLDER HEREBY
- ------------------------------------------------------------------------------------- -------------
<S> <C>
Adams, Daniel........................................................................ 26,000
Allaun, R. Keith..................................................................... 9,600
Bocks, Stephanie M................................................................... 1,800
Chang, Jeffrey....................................................................... 20,000
Chen, Prakoon........................................................................ 24,000
Chester, David W..................................................................... 7,500
Conway, Michael P.................................................................... 30,000
Conway, Robert....................................................................... 1,600
De Kesel, Herman..................................................................... 3,200
Dermer, Daniel B..................................................................... 28,000
Eansor, Gregory A.................................................................... 7,500
Fenstermacher, Thomas................................................................ 4,000
Garcia, Michael...................................................................... 1,111
Gardner, Ben D....................................................................... 5,500
Griffin, Kelly C..................................................................... 9,200
Grillo, Daniel L..................................................................... 24,000
Guerra, Patrick...................................................................... 30,768
Gumperz, Andrew J.................................................................... 5,000
Hahn, Mark K......................................................................... 5,000
Hall, Douglas........................................................................ 11,250
Hammer, Michael...................................................................... 8,000
Hazlewood, David..................................................................... 2,000
Henneuse, Kent....................................................................... 1,390
Hibdon, Alan H....................................................................... 8,000
Horine, Christie..................................................................... 4,000
Hung, Richard........................................................................ 5,416
Hutchings, Barry..................................................................... 3,000
Kitagawa, Elaine..................................................................... 7,700
Knight, Alexandra A.................................................................. 6,000
Lee, Raymond......................................................................... 1,500
Lount, C. Tina....................................................................... 6,000
Muhlitner, David..................................................................... 4,000
Murthy, Sridhar...................................................................... 32,000
Neenan, Edward....................................................................... 4,800
Petrillo Jr., James C................................................................ 5,500
Petrow, Chester B.................................................................... 12,000
Quintal, Maureen..................................................................... 12,000
Spier, Jonathan M.................................................................... 9,000
Steinbacher, Michael R............................................................... 8,000
Streeper, Samuel G................................................................... 7,334
Stroup, Judith A..................................................................... 1,800
Thiers, Ximena....................................................................... 4,000
Whitley, Kevin S..................................................................... 12,000
Williams, Richard A.................................................................. 1,272

Certain unnamed non-affiliates of the Company (1).................................... 49,077
-------------
Total............................................................................ 470,818
-------------
-------------
</TABLE>

- ------------------------------

(1) Each unnamed non-affiliate may use this reoffer prospectus to sell up to
1,000 shares of Common Stock.

17
<PAGE>
PLAN OF DISTRIBUTION

The shares of Common Stock covered by this Reoffer Prospectus are being
registered by the Company for the account of the Registered Stockholders. The
Company understands that none of such shares will be offered through
underwriters.

The Selling Stockholder(s) may sell the shares in one or more transactions
(which may involve one or more block transactions) on the Nasdaq National
Market, in sales occurring in the public market off such system, in privately
negotiated transactions or in a combination of such transactions. Each such sale
may be made either at market prices prevailing at the time of such sale or at
negotiated prices. The Selling Stockholder(s) may sell some or all of the shares
in transactions involving broker-dealers, who may act as agent or acquire the
shares as principal. Any broker-dealer participating in such transactions as
agent may receive commissions from the Selling Stockholder(s) (and, if they act
as agent for the purchaser of such shares, from such purchaser). The Selling
Stockholder(s) will pay usual and customary brokerage fees. Broker-dealers may
agree with the Selling Stockholder(s) to sell a specified number of shares at a
stipulated price per share and, to the extent such a broker-dealer is unable to
do so acting as agent for the Selling Stockholder(s), to purchase as principals
any unsold shares at the price required to fulfill the respective
broker-dealer's commitment to the Selling Stockholder(s). Broker-dealers who
acquire shares as principals may thereafter resell such shares from time to time
in transactions (which may involve cross and block transactions and which may
involve sales to and through other broker-dealers, including transactions of the
nature described above) in the over-the-counter market negotiated transactions
or otherwise, at market prices prevailing at the time of sale or at negotiated
prices, and in connection with such resales may pay to or receive from the
purchasers of such shares commissions. To the knowledge of the Company, there is
currently no agreement with any broker or dealer respecting the sale of the
shares offered hereby. Upon the sale of any such shares, the Selling
Stockholder(s) or anyone effecting sales on behalf of the Selling Stockholder(s)
may be deemed an underwriter, as that term is defined under the Securities Act
of 1933, as amended. The Company will pay all expenses of preparing and
reproducing this Reoffer Prospectus, but will not receive the proceeds from
sales by the Registered Stockholders. Sales will be made at prices prevailing at
the time of such sales.

The Company is bearing all costs relating to the registration of the shares.
Any commissions or other fees payable to broker-dealers in connection with any
sale of the shares will be borne by the Selling Stockholder(s) or other party
selling such shares. In order to comply with certain states' securities laws, if
applicable, the shares will be sold in such jurisdictions only through
registered or licensed brokers or dealers. In certain states the shares may not
be sold unless the shares have been registered or qualified for sale in such
state, or unless an exemption form registration or qualification is available
and is obtained.

DOCUMENTS INCORPORATED BY REFERENCE

Ariba hereby incorporates by reference into this Registration Statement the
following documents previously filed with the Commission:

(a) Ariba's prospectus filed with the SEC under Rule 424(b) under the
Securities Act of 1933, as amended (the "1933 Act"), in connection with
Registration Statement No. 333-76953 on Form S-1 filed with the SEC on
April 23, 1999, together with any and all amendments thereto, in which
there is set forth audited financial statements for Ariba's fiscal years
ended September 30, 1997 and 1998.

(b) Ariba's Registration Statement No. 000-26299 on Form 8-A filed with the
Commission on June 8, 1999, under Section 12 of the Securities and
Exchange Act of 1934, as amended, (the "1934 Act") in which there is
described the terms, rights and provisions applicable to Ariba's
outstanding Common Stock.

18
<PAGE>
All of such documents are on file with the Commission. All documents
subsequently filed by the Company pursuant to Section 13(a), 13(c), 14 or 15(d)
of the Exchange Act prior to the filing of a post-effective amendment which
indicates that all securities to be offered pursuant hereto have been sold or
which deregisters all such securities then remaining unsold shall be deemed to
be incorporated by reference in this Prospectus and to be a part hereof from the
date of the filing of such documents.

INDEMNIFICATION

Section 145 of the Delaware General Corporation Law authorizes a court to
award or a corporation's Board of Directors to grant indemnification to
directors and officers in terms sufficiently broad to permit such
indemnification under certain circumstances for liabilities (including
reimbursement for expenses incurred) arising under the 1933 Act. Article VII,
Section 6 of Ariba's bylaws provides for mandatory indemnification of its
directors and officers and permissible indemnification of employees and other
agents to the maximum extent permitted by the Delaware General Corporation Law.
Ariba's Certificate of Incorporation provides that, under Delaware law, its
directors shall not be liable for monetary damages for breach of their fiduciary
duty as directors to Ariba and its stockholders. This provision in the
Certificate of Incorporation does not eliminate the fiduciary duty of the
directors, and, in appropriate circumstances, equitable remedies such as
injunctive or other forms of non-monetary relief will remain available under
Delaware law. In addition, each director will continue to be subject to
liability for breach of the director's duty of loyalty to Ariba for acts or
omissions not in good faith or involving intentional misconduct, for knowing
violations of law, for actions leading to improper personal benefit to the
director and for payment of dividends or approval of stock repurchases or
redemptions that are unlawful under Delaware law. The provision also does not
affect a director's responsibilities under any other law, such as the federal
securities laws or state or federal environmental laws. Ariba has entered into
Indemnification Agreements with its officers and directors. The Indemnification
Agreements provide Ariba's officers and directors with further indemnification
to the maximum extent permitted by the Delaware General Corporation Law.

19
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

Item 3. INCORPORATION OF DOCUMENTS BY REFERENCE

Ariba, Inc. ("Ariba") hereby incorporates by reference into this
Registration Statement the following documents previously filed with the
Securities and Exchange Commission (the "SEC"):

(a) Ariba's prospectus filed with the SEC under Rule 424(b) under the
Securities Act of 1933, as amended (the "1933 Act"), in connection with
Registration Statement No. 333-76953 on Form S-1 filed with the SEC on April 23,
1999, together with any and all amendments thereto, in which there is set forth
audited financial statements for the Registrant's fiscal years ended September
30, 1997 and 1998.

(b) The description of Ariba's outstanding Common Stock contained in Ariba's
Registration Statement No. 000-26299 on Form 8-A filed with the SEC on June 8,
1999, under Section 12 of the Securities and Exchange Act of 1934, as amended,
(the "1934 Act") in which there is described the terms, rights and provisions
applicable to Ariba's outstanding Common Stock.

All reports and definitive proxy or information statements filed under
Section 13(a), 13(c), 14 or 15(d) of the 1934 Act after the date of this
Registration Statement and prior to the filing of a post-effective amendment
which indicates that all securities offered hereby have been sold or which
deregisters all securities then remaining unsold shall also be incorporated by
reference into this Registration Statement and to be a part hereof from the date
of filing of such documents.

Item 4. DESCRIPTION OF SECURITIES

Not Applicable.

Item 5. INTERESTS OF NAMED EXPERTS AND COUNSEL

Not Applicable.

Item 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS

II-1
<PAGE>
Item 7. EXEMPTION FROM REGISTRATION CLAIMED

The sale and issuance of securities to the selling stockholders was deemed
to be exempt from registration under the Securities Act of 1933 by virtue of
Section 4(2) thereof.

Item 8. EXHIBITS

<TABLE>
<CAPTION>
EXHIBIT NUMBER EXHIBIT
- --------------- -------------------------------------------------------------------------------------------------
<C> <S>
4 Instrument Defining Rights of Stockholders. Reference is made to Ariba's Registration Statement
No. 000-26299 on Form 8-A, which is incorporated herein by reference under Item 3(b) of this
Registration Statement.

23.1 Consent of KPMG LLP, Independent Accountants.

24 Power of Attorney. Reference is made to page II-4 of this Registration Statement.

99.1 Form of Written Compensation Agreement.
</TABLE>

Item 9. UNDERTAKINGS

A. Ariba hereby undertakes:

(1) to file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement

(i) to include any prospectus required by Section 10(a)(3) of the
1933 Act,

(ii) to reflect in the prospectus any facts or events arising after
the effective date of this Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in
this Registration Statement and

(iii) to include any material information with respect to the plan of
distribution not previously disclosed in this Registration Statement or
any material change to such information in this Registration Statement;
PROVIDED, however, that clauses (1)(i) and (1)(ii) shall not apply if the
information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed with or furnished
to the SEC by Ariba under Section 13 or Section 15(d) of the 1934 Act
that are incorporated by reference in this Registration Statement;

(2) that for the purpose of determining any liability under the 1933 Act
each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein and the offering of
such securities at that time shall be deemed to be the initial bona fide
offering thereof and

(3) to remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the Written Compensation Agreements with Certain Designated
Individuals and Certain Unnamed Individuals.

B. Ariba hereby undertakes that, for purposes of determining any liability
under the 1933 Act, each filing of Ariba's annual report under Section 13(a) or
Section 15(d) of the 1934 Act that is incorporated by reference in this
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.

C. Insofar as indemnification for liabilities arising under the 1933 Act
may be permitted to directors, officers or controlling persons of Ariba under
the indemnification provisions summarized in Item 6 or otherwise, Ariba has been
advised that, in the opinion of the SEC, such indemnification is

II-2
<PAGE>
against public policy as expressed in the 1933 Act, and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by Ariba of expenses incurred or paid by a
director, officer or controlling person of Ariba in the successful defense of
any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, Ariba
will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the 1933 Act and will be governed by the final adjudication of such
issue.

II-3
<PAGE>
SIGNATURES

The Securities Act of 1933, as amended, requires that Ariba certifies that
it has reasonable grounds to believe that it meets all of the requirements for
filing on Form S-8 and has had this Registration Statement signed on its behalf
by the undersigned, who is duly authorized, in the City of Mountain View, State
of California on this 15th day of October, 1999.

<TABLE>
<S> <C> <C>
ARIBA, INC.

By: /s/ KEITH J. KRACH
-----------------------------------------
Keith J. Krach
PRESIDENT AND CHIEF EXECUTIVE OFFICER
</TABLE>

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS:

That the undersigned officers and directors of Ariba, Inc., a Delaware
corporation, do hereby constitute and appoint Keith J. Krach and Edward P.
Kinsey, and either of them, the lawful attorneys-in-fact and agents with full
power and authority to do any and all acts and things and to execute any and all
instruments which said attorneys and agents, and either one of them, determine
may be necessary or advisable or required to enable said corporation to comply
with the Securities Act of 1933, as amended, and any rules or regulations or
requirements of the Securities and Exchange Commission in connection with this
Registration Statement. Without limiting the generality of the foregoing power
and authority, the powers granted include the power and authority to sign the
names of the undersigned officers and directors in the capacities indicated
below to this Registration Statement, to any and all amendments, both
pre-effective and post-effective, and supplements to this Registration
Statement, and to any and all instruments or documents filed as part of or in
conjunction with this Registration Statement or amendments or supplements
thereof, and each of the undersigned hereby ratifies and confirms all that said
attorneys and agents, or either one of them, shall do or cause to be done by
virtue hereof. This Power of Attorney may be signed in several counterparts.

IN WITNESS WHEREOF, each of the undersigned has executed this Power of
Attorney on the date indicated.

Under the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------ -------------------------- -------------------

<C> <S> <C>
President, Chief Executive
/s/ KEITH J. KRACH Officer and Chairman of
- ------------------------------ the Board of Directors October 15, 1999
Keith J. Krach (Principal Executive
Officer)
</TABLE>

II-4
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------ -------------------------- -------------------

<C> <S> <C>
Chief Financial Officer,
Vice-President-Finance
/s/ EDWARD P. KINSEY and Administration and
- ------------------------------ Secretary (Principal October 15, 1999
Edward P. Kinsey Financial and Accounting
Officer)

/s/ PAUL HEGARTY
- ------------------------------ Director October 15, 1999
Paul Hegarty

/s/ ROBERT C. KAGLE
- ------------------------------ Director October 15, 1999
Robert C. Kagle

/s/ JOHN B. MUMFORD
- ------------------------------ Director October 15, 1999
John B. Mumford

/s/ HATIM A. TYABJI
- ------------------------------ Director October 15, 1999
Hatim A. Tyabji
</TABLE>

II-5
<PAGE>
EXHIBIT INDEX

23.1 Consent of KPMG LLP, Independent Accountants.

24 Power of Attorney. Reference is made to page II-4 of this Registration Statement.

99.1 Form of Written Compensation Agreement
</TABLE>

<PAGE>
EXHIBIT 23.1

CONSENT OF INDEPENDENT ACCOUNTANTS

The Board of Directors

Ariba, Inc:

We consent to incorporation by reference in the registration statement on
Form S-8 of Ariba, Inc. filed on or about October 15, 1999, of our report dated
April 22, 1999, relating to the consolidated balance sheets of Ariba, Inc. and
subsidiaries as of September 30, 1997 and 1998, and the related consolidated
statements of operations and other comprehensive income (loss), stockholders'
equity, and cash flows for each of the years then ended which appear in the
registration statement (No. 333-76953) on Form S-1 of Ariba, Inc.

/s/ KPMG LLP

Mountain View, California
October 15, 1999

<PAGE>
EXHIBIT 99.1

FORM OF WRITTEN COMPENSATION AGREEMENT

ARIBA. INC. 1996 STOCK PLAN
NOTICE OF STOCK OPTION GRANT

You have been granted the following option to purchase Common Stock of
Ariba, Inc. (the "Company"):

<TABLE>
<S> <C>
Name of Optionee:

Total Number of Shares Granted:

Type of Option: Incentive Stock Option

Nonstatutory Stock Option

Exercise Price Per Share: $

Date of Grant:

Date Exercisable: This option may be exercised, in whole or in
part, at any time after the Date of Grant, but
in no event after the expiration of this
option.

Vesting Commencement Date:

Vesting Schedule: The Right of Repurchase shall lapse with
respect to the first 25% of the Shares subject
to this option upon the Optionee's completion
of 12 months of Service from the Vesting
Commencement Date and an additional 2.08333%
of the Shares subject to this option when the
Optionee completes each month of continuous
Service thereafter.

Expiration Date:
</TABLE>

By your signature and the signature of the Company's representative below,
you and the Company agree that this option is granted under and governed by the
terms and conditions of the 1996 Stock Plan and the Stock Option Agreement, both
of which are attached to and made a part of this document.

OPTIONEE: ARIBA, INC.