BANGALORE: Sunnyvale, USA based Ariba that hitherto focused on development in the area of spend management solutions at its center in India, has recently started a team to work on sourcing software solutions. This development is consequent to the company's acquisition of FreeMarkets last year. The company's engineering EVP H Tayloe Stansbury said, "We have started a small team, which is currently doing quality assurance, and soon we will move to engineering."

He also revealed that the Bangalore center was working on bringing out an single integrated offering that blends the functionality of both spend management as well as sourcing. "This will be shipped in September this year," he added.

Currently, Ariba's India development center has more than 100 employees involved in development, customer support and QA. Stansbury said that the sourcing team would be ramped up gradually. In terms of overall expansion, he informed that Ariba would up its Indian headcount to 150 by the end of this fiscal and double it by the next.

Highlighting the trends in the industry, Stansbury said that the increasing demand for cost management is driving the market. "Customers are getting cost conscious and want software to be flexible enough to meet their requirements," he said. He also pointed out to the trend of customers preferring managed services to merely buying the spend management software.

According to a Gartner report published in December 2004, which evaluated Ariba and FreeMarkets as separate companies, Ariba ranked number two with 13.5 percent market share while FreeMarkets was placed at the third position with 12.5 percent market share in the sourcing and procurement sub-segment of the supply chain management market. The $300 million Ariba's competitors include Oracle, SAP, ELance, PeopleSoft and hosted solution providers like Ketera Technologies.