2000 EY National Entrepreneur of the Year

NEW YORK–(BUSINESS WIRE)–Nov. 13, 2000

Silicon Valley B2B Pioneer Receives Top Honors at Prestigious

14th Annual Awards Conference Recognizing Leaders of Tomorrow

Keith Krach, who enjoys the top spot as chairman and CEO of Ariba, Inc. (Nasdaq: ARBA) – a company pioneering a new e-business category that is expected to grow to more than $1 trillion on a global scale over the next five years – has been named the 2000 National Ernst & Young Entrepreneur Of The Year(R) in the newly created e-Business category.

Krach and his team are credited with bringing recognition to the business-to-business (B2B) e-commerce sector by introducing powerful software that allows buyers and suppliers access to a unified electronic economy. Under Krach’s leadership, Ariba has grown to more than 200 customers and 1,000 employees since it was founded in 1996. After a remarkably successful IPO in June of 1999, Ariba once saw its stock price rise almost 700 percent and has since achieved annual revenues exceeding $100 million.

Krach, along with national Ernst & Young Entrepreneur Of The Year award winners in eight other categories, was selected by an independent panel of judges from among nearly 500 regional award recipients. All of the recipients were acknowledged at an awards ceremony – the world’s largest gathering of entrepreneurs – on Saturday, November 11 in Palm Springs, Calif. National and regional award recipients were culled from nearly 4,000 nominees from around the country.

“Entrepreneurs like Keith Krach are changing the landscape of business and are having a profound effect on our lives,” said Gregory K. Ericksen, National Director of Entrepreneurial Services for Ernst & Young. “He is a model for future entrepreneurs to follow in this technological age where virtually anything is possible.”

The End of the Paper Trail

At the tender young age of 26, Krach had the world by a string. He was just promoted to vice president at General Motors – the world’s largest corporation – and was living in Beverly Hills with his new wife, Jennifer. For most people, this would be enough success. But for Krach, it was just the beginning.

Krach left General Motors in 1987 and moved to Silicon Valley, where he joined Rasna, a mechanical computer-aided design software start-up, as chief operating officer. Rasna quickly became the fastest-growing, privately-held software company in the U.S. in 1994 and successfully merged with Parametric Technology Corporation in 1995.

Krach’s next move was to Benchmark Capital, a legendary Silicon Valley venture capital firm, as an “entrepreneur in residence.” It was here that Krach came across the Ariba opportunity. Bolstered by research showing how business-to-business commerce had the potential to be 10 times as large as business-to-consumer commerce, Krach and six other founders raised $6 million in venture capital, opening Ariba’s doors in September of 1996.

Within seven months, Ariba shipped the first version of Ariba Buyer (called Ariba ORMS at the time), a software package which allows corporations to streamline their internal procurement processes, build state-of-the-art B2B marketplaces and connect to suppliers and commerce service providers over the Internet.

Almost immediately, a number of Fortune 100 clients began to realize the benefits of an automated, Web-based procurement system made possible by Ariba’s software. Without the software, employees who need to order items as mundane as paper clips must fill out complicated purchase orders and keep track of them as they move through a time-consumer approval process. With the software, employees go online and access a catalog listing the products of more than 10,000 suppliers. They are then led step-by-step through the buying process by a user interface that allows orders to be tracked electronically as they are created, approved by managers, received by suppliers, shipped, and billed. Because of Ariba Buyer, the entire procurement process occurs online, allowing companies to save money and boost overall profits.

Advanced Micro Devices (AMD), Ariba’s first customer, says it expects to generate, at a minimum, three-to-15 percent annual savings on several hundred million dollars in expenditures as a result of Ariba Buyer. Other customers Krach has been instrumental in bringing on agree that the savings is significant.

Recipe for Success

When questioned about the success of Ariba, Krach cites a strategic business model that is based on the principle of attraction: 1) capture the buying power of Fortune 100 companies and attract suppliers; 2) build a network of suppliers and attract market makers; and 3) allow market makers to build a variety of B2B marketplaces so that everyone can take maximum advantage of online B2B trade.

Krach also cites a strong dedication to customer service, motivating Ariba’s sales representatives with the understanding that happy customers lead to increased market share, which leads to increased revenues, and – ultimately – positive cash flow.

With regard to the future, Ariba expects to expand its reach into industries that have yet to adopt B2B initiatives. One sector of the industry that is already gaining momentum within Ariba is the business-to-government space, and the company hopes to grow this base exponentially over the next few years.

National EOY Finalists

In the e-Business Entrepreneur Of The Year category, national finalists are: Philip Berber, chairman, CyBerCorp, an electronic trading technology and brokerage group, Austin, Texas; and Jeffrey Dachis, CEO and president, Razorfish, Inc. (Nasdaq: RAZF), a provider of global digital solutions, New York, N.Y.

About The Ernst & Young Entrepreneur Of The Year Awards Program

The Entrepreneur Of The Year awards program was created and is produced by professional services firm Ernst & Young LLP to honor outstanding entrepreneurs whose ingenuity and perseverance have created and sustained successful growing business ventures. It is co-sponsored nationally by USA Today, The Nasdaq Stock Market, and the Kauffman Center for Entrepreneurial Leadership at the Ewing Marion Kauffman Foundation.

In addition to the e-Business award, award finalists and winners were honored in eight other national categories, including the following: Master Entrepreneur Of The Year; Manufacturing Entrepreneur Of The Year; Service Entrepreneur Of The Year; Real Estate/Construction Entrepreneur Of The Year; Technology/ Communications Entrepreneur Of The Year; Health Sciences Entrepreneur Of The Year; Retail Entrepreneur Of The Year; and Supporter of Entrepreneurship.

Additionally, for the fourth year, Dr. Stephen R. Covey, co-chairman of Franklin Covey Co., presented the Ernst & Young Entrepreneur Of The Year award for Principle-Centered Leadership. The award, which recognizes entrepreneurs who have achieved outstanding business results in a deeply principled manner, went to Jack Lowe, Jr., CEO and chairman of the board, TDIndustries, an employee-owned construction and service company located in Dallas.

Ernst & Young, a global leader in professional services, helps clients to quickly and confidently make financial decisions designed to enhance value. Its 77,000 people in more than 130 countries have the industry and financial experience to provide fresh perspectives on operating in the new economy. Ernst & Young offers traditional audit and tax services, as well as customized services in corporate finance, online security, risk management, the valuation of intangibles and e-business acceleration. In addition, legal services are available in various parts of the world where permitted. A collection of Ernst & Young’s latest ideas on the new economy can be found at www.ey.com/thoughtcenter.

Ernst & Young refers to the U.S. firm of Ernst & Young LLP and other members of the global Ernst & Young organization.