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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

For the fiscal year ended September 30, 2011

OR

For the transition period from                      to                     

Commission file number 000-26299

ARIBA, INC.

(Exact name of registrant as specified in its charter)

(650) 390-1000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

None

Securities registered pursuant to Section 12(g) of the Act:

Common Stock, $0.002 par value

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  x    No  ¨

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    Yes  ¨    No  x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company (as defined in Rule 12b-2 of the Exchange Act).

Indicate by check mark whether registrant is a shell company (as defined in Exchange Act Rule 12b-2).    Yes  ¨    No  x

The aggregate market value of the common stock held by non-affiliates of the registrant as of March 31, 2011, the last business day of the registrant’s most recently completed second fiscal quarter (based on the closing price of $34.14 on the Nasdaq Global Market as of that date), was approximately $3.3 billion.

As of October 31, 2011, there were 99,730,000 shares of the registrant’s common stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant’s definitive proxy statement to be delivered to stockholders in connection with the 2012 annual meeting of stockholders are incorporated herein by reference in Part III of this Annual Report on Form 10-K to the extent stated herein.

Table of Contents

ARIBA, INC.

FORM 10-K

September 30, 2011

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FORWARD-LOOKING STATEMENTS

The information in this report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Such statements are based upon current expectations that involve risks and uncertainties. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking statements. For example, words such as “may,” “will,” “should,” “estimates,” “predicts,” “potential,” “continue,” “strategy,” “believes,” “anticipates,” “plans,” “expects,” “intends” and similar expressions are intended to identify forward-looking statements. Our actual results and the timing of certain events may differ significantly from the results discussed in the forward-looking statements. Factors that might cause or contribute to such a discrepancy include, but are not limited to, those discussed in this report in the section entitled “Risk Factors” and elsewhere in this report. We undertake no obligation to revise or update publicly any forward-looking statements after the date of this document. Ariba, Inc. is referred to herein as “Ariba” or “we.”

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PART I

Overview

Ariba, Inc. is the leading provider of collaborative business commerce solutions. Ariba combines industry-leading technology with the world’s largest web-based trading community to help companies discover, connect and collaborate with a global network of partners—all in a cloud-based environment. Using the Ariba^® Commerce Cloud, businesses of all sizes can buy, sell and manage cash more efficiently and effectively. Over 700,000 companies around the globe are enabled on the Ariba Commerce Cloud to simplify inter-enterprise commerce and enhance results.

Ariba was incorporated in Delaware in September 1996. Our principal executive offices are located at 910 Hermosa Court, Sunnyvale, California 94085.

Industry Background

We believe that the first wave of technology-enabled productivity focused on making employees more effective in their daily jobs by simplifying key tasks such as developing documents, presentations, and spreadsheets and communicating with other team members. And it led to the dawn of the desktop operating system. We believe that the second wave leveraged web-based technologies to drive greater productivity within particular functional areas like procurement and human resources. And with it came the advent of the enterprise operating system. We believe that the next wave of productivity aims to attack the inefficiencies that remain between companies to enable more effective collaboration among trading partners and will be fueled by cloud-based platforms that allow businesses to share common business processes in areas like product development and commerce.

Cloud Services Market

In its most recent Cloud Services Forecast Report, Gartner Research, a third-party research firm, estimated a $176.8 billion worldwide market of cloud services by 2015, which represents a five-year compounded annual growth rate from 2010 of 18.9%. Gartner estimates that 75% of current SaaS delivery revenue could be considered as a cloud service today, and this could exceed 90% by 2014 as the SaaS model matures and converges with cloud service models.

Ariba Collaborative Business Commerce Solutions

Ariba provides cloud-based collaborative business commerce solutions that enable enterprises to buy, sell and manage cash more efficiently and effectively. We believe that software is only one part of helping companies achieve success. As such, we combine SaaS technology with a web-based community and a global network of trading partners. This combination is designed to optimize the complete commerce lifecycle, enable companies to discover, connect and collaborate with each other and help companies control costs, minimize risk, improve profits and enhance cash flow and operations. Additionally, we offer expert capabilities to augment internal resources and skills to ensure that our customers maximize the value of our solutions.

Ariba software is built to leverage the Internet and provide enterprises with real-time access to their business data and their business partners. Our collaborative commerce solutions are delivered in a flexible manner, depending upon the needs and preferences of the customer. Historically, our software was primarily provided as installed applications that were deployed behind a customer’s firewall. However, in response to customer demand, we began providing on-demand delivery of our software solutions in 2006, whereby applications are hosted by Ariba or a third party, and customers access the solution via the Internet. Our on-demand delivery model is designed to empower companies of all sizes to achieve greater control of their spend and drive continuous improvements in financial and supply chain performance.

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Our solutions allow enterprises to take a step-by-step approach to managing business commerce with products and services that work together to address key activities, including:

Ariba Spend Visibility Solutions:

Ariba Spend Visibility combines an industry leading knowledge classification base with advanced technologies and an integrated database of more than 150 million suppliers to enable rich and accurate classification and enrichment of spend across all categories, systems and divisions. Ariba Spend Visibility offers an integrated business commerce dashboard for a 360-degree view of all purchasing activity and data. The solution incorporates the powerful yet easy-to-use Ariba Analysis™ reporting engine with comprehensive data enrichment—providing deep and ongoing visibility into both internal purchasing as well as external supply and sourcing market dynamics.

Ariba Sourcing Solutions:

The Ariba Sourcing Solutions cover the full spectrum of sourcing activities, from the development of a strategic approach to capture savings, to the sourcing and award negotiation phase, and finally the monitoring of supplier performance.

Ariba Contract Management Solution:

Ariba Contract Management helps legal, finance, procurement, and sales operations professionals tasked with driving contract management to manage all types of agreements, including procurement, sales, and internal contracts. With Ariba Contract Management, companies can develop best-value agreements by addressing the two major components of the contract lifecycle: (1) contract management—from contract request, contract authoring, workflows to address the contracting process, negotiation and approval, and contract execution via electronic signatures; and (2) commitment management—including all ongoing compliance and performance management through task-driven reminders and search and reporting capabilities as well as contract renewal activities.

Ariba Procurement Solutions:

The Ariba Procurement Solutions allow customers to manage the procurement process from requisition, through ordering, receiving, invoice reconciliation and payment. The solutions are designed to facilitate the procurement process for all categories of corporate spend.

Ariba Supplier Management Solutions:

Ariba Supplier Information Management enables companies to identify and assess new sources of supply, on board approved suppliers and gain a 360-degree view of supplier information performance and risk. With Ariba’s Supplier management services and expertise, companies can access best practices and templates to ensure proper supplier selection, measurement and compliance management.

Ariba Supplier Performance Management enables companies to define, measure aggregate and act upon performance metrics of their supply base, including the ability to bring together qualitative and quantitative information and to collaborate with suppliers throughout the process.

Ariba Discovery:

Ariba Discovery matches business buyers and sellers globally, where buying power meets 700,000 enabled sellers on the Ariba Network. Ariba Discovery brings buyers and sellers directly to the kinds of business relationships that match their requirements—no matter how unique.

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Ariba Contract Management for Sales Contracts Solution:

The Ariba Contract Management for Sales Contracts Solution covers the full spectrum of a contract’s lifecycle, from the contract request, contracts authoring, workflows to address the contracting process, negotiation and approval, and contract execution via electronic signatures. In addition, the Ariba Contract Management for Sales Contracts Solution includes all ongoing compliance and performance management through task-driven reminders and search and reporting capabilities as well as contract renewal activities.

Ariba Supplier Sales and Marketing Programs:

The Ariba Supplier Sales and Marketing Program prepackages networking, marketing and consulting expertise to help companies grow their online commerce business faster and more efficiently.

Ariba Network Catalog, Order and Invoice Collaboration:

Ariba Network Catalog, Order and Invoice Collaboration allows end-to-end collaboration on order fulfillment, including orders, change orders, confirmations, cancellations and advance shipping notices.

Ariba Invoice Management Solutions:

Ariba Invoice Management Solution automates supplier on-boarding and interactions for suppliers, provides suppliers with full visibility into invoice status and cash forecasting and supports paperless operations for value added tax (“VAT”) compliance for global commerce.

Ariba Invoice Conversion Service consolidates the processing of paper and electronic invoices, enabling full automation of large quantities of invoices and easily integrates them into a company’s existing systems.

Ariba Global Invoicing and Compliance supports paperless operations and VAT compliance, serving the needs of customers in the European Union and other countries using indirect tax mechanisms such as VAT, goods and services tax, and provincial services tax.

Ariba Payment Management Solution:

Ariba Payment Management Solution allows back-office systems to transmit payments to suppliers via ACH with detailed remittance information.

Ariba Discount Professional Solution:

Ariba Discount Professional Solution allows full automation of early payment discount management from initial offer to agreement, including transactions involving prorated or dynamic discounting, and settlement processes.

Ariba Receivables Financing Solution (powered by the Receivables Exchange):

Ariba Receivables Financing Solution (powered by the Receivables Exchange), working through the Ariba Network, allows a global network of capital providers to bid on receivables through competitive auctions.

Ariba Network

We believe the Ariba Network is the world’s largest trading partner community for business, connecting more buyers and more sellers around more business commerce in more regions of the world than any other supply network. Together with Ariba’s Quadrem Network and Ariba Discovery, over 700,000 businesses are enabled on Ariba’s trading platforms, consisting of registered users that engage in commerce or have access to these platforms. Additionally, it supports all B2B commerce needs, including e-procurement, e-invoicing, and working capital management.

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Because it’s based in the Ariba Commerce Cloud, businesses do not need to add to head count to use the Ariba Network or add to information technology infrastructure to support a myriad of portals and systems. By simply integrating and extending current backend systems into the Ariba Commerce Cloud, businesses can manage and optimize their trading relationships through a single user interface, transacting and collaborating virtually and instantly, with far greater accuracy and visibility.

Ariba Commerce Services

In addition to software, Ariba’s collaborative business commerce solutions include a broad range of services designed to improve the return on investment our customers receive through the use of our solutions. Ariba’s services are focused on delivering sustainable, company-wide capability and rapid results.

Ariba Best Practice Center:

The Ariba Best Practice Center provides access to Ariba’s process expertise to help achieve better results and enduring enablement from SaaS solutions. Services include strategic coaching and guidance, configuration coaching, reporting guidance, and more.

Ariba Business Commerce Enablement:

Ariba Business Commerce Enablement helps companies quickly identify, enable, and realize value through a custom-tailored business commerce program using our domain expertise, world-class analytics, and considerable insight into what buyers and sellers need to facilitate collaboration.

Ariba Content and Connectivity:

Ariba Content and Connectivity helps companies connect with their trading partners on the Ariba Network, including Supplier Enablement, Catalog Enablement, Catalog Maintenance, and Buyer Membership.

Ariba Customer Support:

Ariba Customer Support provides more than 170 resources dedicated to supporting customers, as well as access to developers, engineers, product management, operations, and others.

Ariba Education and Change Management:

Ariba Education and Change Management provides the knowledge and skills required to successfully deploy, use, and maintain Ariba’s business commerce solutions for our customers and their trading partners.

Ariba Technology Services:

Ariba Technology Services provide upgrade services, application management services, which include adoption and management of unique customer configuration and enhancements, and hosting services, which provide Ariba solution deployment and operational maintenance in a secure, fully managed data center.

Ariba Working Capital Services:

Ariba Working Capital Services provide programs for uncovering the substantial value hidden in working capital.

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Employees

As of September 30, 2011, we had a total of 2,432 employees, including 452 in research and development, 613 in sales and marketing, 1,086 in professional services, customer support and training, and 281 in administration, finance, legal, human resources and information technology. Of these employees, 1,130 were located in the United States and 1,302 were located outside the United States. None of our employees are represented by a collective bargaining agreement, nor have we experienced any work stoppage. We consider our relations with our employees to be good.

Sales

We sell our solutions primarily through our worldwide direct sales organization. The direct sales force consists of sales professionals, application specialists and supporting personnel.

Marketing

Our marketing strategy is to continually elevate our brand, expand the awareness of our collaborative business commerce solutions in new market segments, and generate significant demand for our solutions.

Our primary marketing activities include:

Customer Service, Training and Support

We believe that customer satisfaction is essential for our long-term success, and we therefore offer comprehensive customer assistance programs. Our technical support provides response to and resolution of customer technical inquiries and is available to clients by telephone or over the web. We use a customer service automation system to track each customer inquiry until it is resolved.

Our Ariba Education Services group delivers education and training to our clients and partners in various offices, including Atlanta, Georgia, Sunnyvale, California, Pittsburgh, Pennsylvania and London, England. We offer a comprehensive series of classes to provide the knowledge and skills to successfully deploy, use and maintain our products and solutions through Ariba University. Ariba University delivers Institute for Supply Management (“ISM”) training and change management services to customers and partners. Through a comprehensive offering of traditional classroom delivery at an Ariba campus, client on-site delivery, web-based training and consulting services, Ariba Education Services provide the knowledge and skills required to successfully deploy, use and maintain the Ariba product line.

Seasoned instructors, instructional designers and education consultants deliver more than 350 classes per year to more than 3,000 students in a hands-on, role-based learning environment in our learning centers or on-site at the customer’s location. Participants who successfully complete our programs will receive continuing education hours. These hours may be applied toward ISM Certified Purchasing Manager recertification and/or Accredited Purchasing Practitioner reaccreditation program requirements.

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Research and Development

We introduced our initial product, Ariba Buyer, in June 1997, and since then have released a number of new products and services to address the needs of sourcing, procurement, finance, accounts payable, treasury, legal and sales and marketing professionals. We began to operate the Ariba Network in April 1999 and continue to provide enhancements to it on an ongoing basis. We introduced Ariba Sourcing in September 2001, and upgraded the solution in September 2004 to incorporate functionality from legacy FreeMarkets, Inc. applications. In addition, we have architected our applications to be more easily deployed via an on-demand model. During fiscal years 2006 through 2011, we released, and continuing in fiscal year 2012 we plan to release, on-demand versions of many of our software applications. If we are unable to develop new products or enhancements to existing products or corrections on a timely and cost-effective basis, particularly on-demand versions of our products, or if these new products or enhancements do not have the features or quality measures to make them successful in the marketplace, our business will be harmed.

Our research and development expenses were $60.5 million, $46.0 million and $43.5 million during the fiscal years ended September 30, 2011, 2010 and 2009, respectively. We also recorded amortization of acquired technology as part of cost of revenues of $1.7 million, $302,000 and $1.5 million during the fiscal years ended September 30, 2011, 2010 and 2009, respectively.

Our research and development organization focuses on our various Ariba Business Commerce solutions and the Ariba Network, as well as on server and infrastructure development, user interface and Internet application design, tools development, enterprise integration, operations, quality assurance, documentation, release management and advanced development.

International Operations

We sell our software and provide services and expertise worldwide. Our geographic coverage allows us to draw on business, technical and sourcing expertise from a worldwide workforce which provides stability to our operations and revenue streams to leverage geography-specific economic trends. Through our acquisitions of Quadrem in January 2011 and b-process in October 2011, we have increased the size of our international operations.

We currently have offices in 25 countries. Substantially all of our international operations are conducted through wholly-owned subsidiaries. Revenues from our international operations were $167.9 million, $89.5 million and $84.8 million for the fiscal years ended September 30, 2011, 2010 and 2009, respectively.

We operate in a single operating segment. See Note 10 of Notes to Consolidated Financial Statements for additional financial information about our geographic areas and Risk Factors—“Our Business is Susceptible to Numerous Risks Associated with International Operations” in Part I, Item 1A of this Annual Report on Form 10-K for risks relating to our international operations.

Competition

The market for business commerce applications is highly competitive, rapidly evolving and fragmented and subject to changing technology and shifting customer needs.

Our principal direct competition comes from ERP vendors whose software is installed by customers directly. We also compete with specialty vendors that offer their software on a hosted basis or under a perpetual license. In our services business, we compete with several large and regional service providers. We anticipate additional competition from other established and emerging companies as the market continues to expand.

Our current principal competitors include:

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We believe the principal competitive factors considered with respect to, and the relative competitive standing of, our business commerce software solutions are:

Many of our current and potential competitors, such as ERP software vendors including SAP AG and Oracle, have longer operating histories, greater name recognition, larger marketing budgets and significantly greater resources, and a larger installed base of customers than we do. These vendors could also introduce business commerce solutions that are included as part of broader enterprise application solutions at little or no cost to their customers. They may also be able to devote greater resources to the development, promotion and sale of their products than we can to ours, which can enable them to respond more quickly to new technology, introduce new business commerce modules and respond to changes in customer needs. 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, including lower prices and other incentives not matched by us. 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 and achieve greater market acceptance. The industry has experienced consolidation with both larger and smaller competitors acquiring companies to broaden their offerings or increase scale. As a result, we may not be able to successfully compete against our current and future competitors.

Intellectual Property and Other Proprietary Rights

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 our software products and require our customers to enter into license agreements, which impose restrictions on their ability to utilize the software. The license agreements generally do not provide for a right to return. See Note 1 of Notes to Consolidated Financial Statements. 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 and electronic materials under trade secret and copyright laws, which may afford only limited protection. We can make no assurance that any of our proprietary rights with respect to our solutions will be viable or of value in the future since the validity, enforceability and type of protection of proprietary rights in these evolving technologies are uncertain and still evolving.

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As of September 30, 2011, we had 55 United States patents issued and 28 United States patent applications pending. We also have seven foreign patents issued and zero foreign patent applications pending. It is possible that no patents will be issued from our pending patent applications or that, if issued, or our potential future patents may be successfully challenged. It is also possible that we may not develop proprietary products or technologies that are patentable, that any patent issued to us may not provide us with any competitive advantages, or that the patents of others will harm our ability to do business.

We rely on technology that we license from third parties, including software that is integrated with internally developed software and used in our software products to perform key functions. If we are unable to continue to license any of this software on commercially reasonable terms, or at all, we will face delays in releases of our software until equivalent technology can be identified, licensed or developed, and integrated into our current product. These delays, if they occur, could materially and adversely affect Ariba.

Ariba and the Ariba logo are registered trademarks in the United States. In addition, Ariba, the Ariba logo and the Ariba “boomerang” design are registered in one or more foreign countries. The above-mentioned trademark applications are subject to review by the applicable governmental authorities, may be opposed by private parties, and may not be issued.

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 and Internet industries 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 rights. 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, divert management’s time from developing our business, cause product shipment delays, require us to enter into royalty or licensing agreements or require us to satisfy indemnification obligations to customers. Royalty or licensing agreements, if required, may not be available on terms acceptable to us or at all, which could harm our business. In addition, we may need to commence litigation or take other actions to protect our intellectual property rights which may be costly, time-consuming and distracting to management and would result in the loss of our intellectual property.

Available Information

We file reports required of public companies with the Securities and Exchange Commission (“SEC”). These include annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements and other reports, and amendments to these reports. The public may read and copy the materials we file with the SEC at the SEC’s Public Reference Room at 100 F Street, NE, Washington, D.C. 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC also maintains a Web site at www.sec.gov that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. We make available free of charge on the Investor Relations section of our corporate Web site all of the reports we file with the SEC as soon as reasonably practicable after the reports are filed. Copies of Ariba’s fiscal 2011 Annual Report on Form 10-K may also be obtained without charge by contacting Investor Relations at InvestorInfo@ariba.com or by calling 650-390-1200. Our Internet address is www.ariba.com.

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EXECUTIVE OFFICERS OF THE REGISTRANT

Our executive officers and their ages as of October 31, 2011 are as follows:

Robert M. Calderoni has served as Ariba’s Chairman and Chief Executive Officer since July 2003. From October 2001 to July 2003, Mr. Calderoni served as Ariba’s President and Chief Executive Officer. From October 2001 to December 2001, Mr. Calderoni also served as Ariba’s Interim Chief Financial Officer. From January 2001 to October 2001, Mr. Calderoni served as Ariba’s Executive Vice President and Chief Financial Officer. Mr. Calderoni was also an employee of the Company from November 2000 to January 2001. In addition to serving as a director of Ariba, he is also a member of the board of directors of Juniper Networks, Inc., a provider of network infrastructure systems, and KLA-Tencor Corporation, a supplier of process control and yield management solutions for the semiconductor and related microelectronics industries. Mr. Calderoni holds a Bachelor of Science degree in Accounting and Finance from Fordham University.

Kevin Costello has served as Ariba’s President since November 2007. Mr. Costello also served as Ariba’s Executive Vice President and Chief Commercial Officer from October 2004 until November 2007. From October 2003 until October 2004, Mr. Costello served as Ariba’s Executive Vice President of Sales and Solutions. From May 2002 until October 2003, Mr. Costello served as Ariba’s Executive Vice President, Ariba Solutions Delivery. Mr. Costello holds a Bachelor of Science degree in Accounting from the University of Illinois.

Kent Parker has served as Ariba’s Chief Operating Officer since November 2007. Mr. Parker also served as Ariba’s Executive Vice President, Ariba Global Services Organization from July 2004 until November 2007. From April 2000 to July 2004, Mr. Parker held numerous positions including Senior Vice President of Global Sourcing Services at FreeMarkets, which we acquired in July 2004. Mr. Parker holds a degree in mechanical engineering from the University of Evansville and an M.B.A from the Amos Tuck School of Business Administration at Dartmouth College.

Ahmed Rubaie has served as Ariba’s Executive Vice President and Chief Financial Officer since August 2008. From December 2000 to July 2008, Mr. Rubaie held various senior finance positions at Avery Dennison a manufacturer of office and consumer products. Prior to Avery Dennison, Mr. Rubaie held various positions at BHP Billiton and spent six years in public accounting with both Coopers & Lybrand and Deloitte & Touche. Mr. Rubaie holds a Bachelor of Arts degree in Economics and Management from Albion College and a J.D. degree from University of Detroit School of Law.

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In addition to other information in this Form 10-K, the following risk factors should be carefully considered in evaluating Ariba and our business because such factors may have a significant impact on our business, operating results and financial condition. As a result of the risk factors set forth below and elsewhere in this Form 10-K, actual results could differ materially from those projected in any forward-looking statements.

The Economic Downturn Adversely Impacted Our Business and May Continue to Adversely Impact Our Business Beyond Our Expectations.

Our business has been adversely affected by the credit crises and uncertain worldwide economic conditions. Although our business commerce solutions help companies reduce the cost of their goods and services and may therefore be perceived as even more strategic during adverse economic conditions, current or future economic conditions may adversely impact our business beyond our expectations. Among other things, adverse economic conditions could result in reduced revenues, increased operating losses and reduced cash flows from operations, greater than anticipated uncollectible accounts receivables and increased allowances for doubtful accounts receivable, impairment of financial and non-financial assets and increased restructuring charges.

The Benefits We Anticipate From Acquiring Quadrem and b-process May Not Be Realized.

We acquired Quadrem and b-process with the expectation that each of the acquisitions will result in various benefits including, among other things, accelerating our penetration into the international market segments, enhancing our customer base and recognizing efficiencies. We may not realize any of these benefits or may not realize them as rapidly, or to the extent, anticipated by our management and certain financial or industry analysts. Quadrem and b-process’s contribution to our financial results may not meet the current expectations of our management for a number of reasons, including integration risks, and could dilute our profits beyond the current expectations of our management. Potential liabilities assumed in connection with our acquisitions of Quadrem and b-process also could have an adverse effect on our business, financial condition and operating results. If these risks materialize, our stock price could be materially adversely affected.

Our Business Is Susceptible to Numerous Risks Associated with International Operations.

International operations have represented a significant portion of our revenues over the past three years. We have committed and expect to continue to commit significant resources to our international sales and marketing activities. We are subject to a number of risks associated with these activities. These risks generally include:

The risks are increased with our recently completed acquisitions of Quadrem and b-process. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Note 3 in Notes to Consolidated Financial Statements. A substantial majority of Quadrem’s revenues are generated outside the United States, as it conducts business in North America, South America, Europe, the Middle East, Africa, Asia, and Australia.

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For international sales and expenditures denominated in foreign currencies, we are subject to risks associated with currency fluctuations. Since the majority of our non-United States sales are priced in currencies other than the United States dollar, a strengthening of the dollar may reduce the level of reported revenues. If such events continue to occur, our net revenues could be impacted, since a significant portion of our net revenues are derived from international operations. We have partially hedged risks associated with foreign currency transactions in order to minimize the impact of changes in foreign currency exchange rates by utilizing forward contracts to hedge trade and intercompany receivables and payables. There can be no assurance that our hedging strategy will be successful or that currency exchange rate fluctuations will not have a material adverse effect on our operating results.

Our Success Depends on Market Acceptance of Best of Breed Business Commerce Solutions.

Our success depends on widespread customer acceptance of best of breed business commerce solutions from vendors like us, rather than solutions from ERP software vendors and others that are part of a broader enterprise application solution. For example, ERP vendors, such as Oracle and SAP, could bundle business commerce modules with their existing applications and offer these modules at little or no cost. If our products and services do not achieve continued customer acceptance, our business will be seriously harmed.

We Have a History of Losses and May Incur Significant Additional Losses in the Future.

We have a significant accumulated deficit as of September 30, 2011 resulting in large part from cumulative charges for the amortization and impairment of goodwill and other intangible assets. We may incur significant losses in the future for a number of reasons, including those discussed in other risk factors and the following:

Our Quarterly Operating Results May Be Volatile, Difficult to Predict and May Be Unreliable as Indicators of Future Performance Trends.

Our quarterly operating results have varied significantly in the past and will likely continue to vary significantly in the future. As a result, period-to-period comparisons of our results may not be meaningful and should not be relied upon as indicators of future performance. In addition, we may fail to achieve forecasts of quarterly and annual revenues and operating results.

Our quarterly operating results have varied or may vary depending on a number of factors, including the following:

Risks Related to Revenues:

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Risks Related to Expenses:

We May Fail to Achieve Our Financial Forecasts Due to Inaccurate Sales Forecasts and Other Factors.

Our revenues may be difficult to predict and, as a result, our quarterly financial results can fluctuate substantially. We estimate quarterly revenues in part based on our sales pipeline, which is an estimate of potential customers, their stage of the sales process, the potential amount of their sales contracts and the likelihood that we will convert them into actual customers during the quarter. To the extent that any of these estimates are inaccurate, our actual revenues may be different than our forecasted revenues.

Our On-Demand Strategy Carries a Number of Risks Which May Be Harmful to Our Business.

We derive a substantial portion of our revenue from subscriptions to our on-demand applications (i.e. multi-tenant, hosted software solutions). We have experienced and may continue to experience a deferral of revenues and cash payments from customers.

Additional risks with the on-demand model include the following:

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We May Incur Additional Restructuring Charges that Adversely Affect Our Operating Results.

We have recorded significant restructuring charges relating to the abandonment of numerous leased facilities, including most notably portions of our Sunnyvale, California Eleventh Avenue facility. For example, in the years ended September 30, 2010 and 2009, we revised our estimates for sublease commencement dates based on the remaining terms of the lease in Sunnyvale, California and continued soft market conditions in the Northern California real estate market, resulting in charges of $8.6 million and $6.8 million, respectively. In the year ended September 30, 2011, our restructuring costs included $12.3 million of lease abandonment costs and $3.3 million of accelerated depreciation as a result of moving our headquarters within Sunnyvale, California and abandoning our previous headquarters facility on Eleventh Avenue. Additional lease abandonment costs, resulting from the abandonment of additional facilities could adversely affect our operating results.

Our Business Could Be Seriously Harmed If We Fail to Retain and Expand Our Key Personnel, Particularly Given Competitive Hiring Conditions in the Technology Sector.

Our future performance depends on the continued service of our senior management, product development and sales personnel. The loss of the services of one or more of these personnel could seriously harm our business. Our ability to retain and attract key employees has become harder given competitive hiring conditions in the technology sector. In addition, uncertainty created by turnover of key employees could result in reduced confidence in our financial performance which could cause fluctuations in our stock price and result in further turnover of our employees.

We Sometimes Experience Long Implementation Cycles, Which May Increase Our Operating Costs.

Many of our products are complex applications that are generally deployed with many users. Implementation of these applications by enterprises is sometimes complex, time consuming and expensive. When we experience long implementation cycles, we may incur costs at a higher level than anticipated, which may reduce the anticipated profitability of a given implementation.

We Could Be Subject to Potential Claims Related to Our On-Demand Solutions, As Well As Our Supplier Networks.

We warrant to our customers that our on-demand solutions and our supplier networks will achieve specified performance levels to allow our customers to conduct their transactions. To the extent we fail to meet warranted performance levels, we could be obligated to provide refunds or credits for future use or maintenance. Further, to the extent that a customer incurs significant financial hardship due to the failure of our on-demand solutions or our supplier networks to perform as specified, we could be exposed to additional liability claims.

Failure to Establish and Maintain Strategic Relationships with Third Parties Could Seriously Harm Our Business, Results of Operations and Financial Condition.

We have established strategic relationships with a number of other companies. These companies are entitled to resell our products, to host our products for their customers, and/or to implement our products within their customers’ organizations. We cannot be assured that any existing or future resellers or hosting or implementation partners will perform to our expectations. For example, in the past we have not realized the anticipated benefits from strategic relationships with a number of resellers. If our current or future strategic partners do not perform to expectations, or if they experience financial difficulties that impair their operating capabilities, our business, operating results and financial condition could be seriously harmed.

We Face Intense Competition. If We Are Unable to Compete Successfully, Our Business Will Be Seriously Harmed.

The market for our solutions is intensely competitive, evolving and subject to rapid technological change. This competition could result in further price pressure, reduced profit margins and loss of market share, any one

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of which could seriously harm our business. Competitors vary in size and in the scope and breadth of the products and services they offer. We compete with several major enterprise software companies, including SAP AG and Oracle. In addition, we compete with smaller specialty vendors or smaller niche providers of sourcing or procurement products and services, including Emptoris, Basware, BravoSolution, Zycus, Perfect Commerce, Hubwoo, Rearden Commerce, Coupa, Iasta, OB10, GXS, Aravo, Xign, Selectica, SciQuest, IQNavigator, and Fieldglass. Because business commerce is a relatively new software and solutions category, we expect additional competition from other established and emerging companies if this market continues to develop and expand. For example, third parties that currently help implement Ariba Buyer and our other products could market products and services that compete with our products and services. These third parties, which include IBM, Accenture, Capgemini, Deloitte Consulting, BearingPoint and Unisys, are generally not subject to confidentiality or non-compete agreements that restrict such competitive behavior.

Many of our current and potential competitors, such as ERP software vendors including Oracle and SAP, have longer operating histories, significantly greater financial, technical, marketing and other resources, significantly greater name recognition and a larger installed base of customers than us. These vendors could also introduce business commerce solutions that are included as part of broader enterprise application solutions at little or no cost to their 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, including lower prices and incentives not matched by us. 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 increase their market share. We also expect that competition will increase as a result of industry consolidations. The industry has experienced consolidation with both larger and smaller competitors acquiring companies to broaden their offerings or increase scale. As a result, we may not be able to successfully compete against our current and future competitors.

Any Recent or Future Acquisitions or Dispositions Will Be Subject to a Number of Risks.

Any recent or future acquisitions or dispositions will subject us to a number of risks, including:

If We Fail to Develop Products and Services on a Timely and Cost-Effective Basis, or If Our Products or Services Contain Defects, Our Business Could Be Seriously Harmed.

In developing new products and services, we may:

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If new releases of our products or potential new products are delayed, we could experience a delay or loss of revenues and customer dissatisfaction.

Litigation Could Seriously Harm Our Business.

There can be no assurance that future litigation will not have a material adverse effect on our business, financial position, results of operations or cash flows, or that the amount of any accrued losses is sufficient for any actual losses that may be incurred. See “Litigation and other proceedings” in Note 9 of Notes to Consolidated Financial Statements.

We May be Sued by Third Parties for Alleged Infringement of Their Proprietary Rights.

There is considerable patent and other intellectual property development activity in our industry. Our success depends upon our not infringing upon the intellectual property rights of others. Our competitors, as well as a number of other entities and individuals, may own or claim to own intellectual property relating to our industry. Even though we have policies against our unauthorized use of third party intellectual property rights and we take precautions not to use such intellectual property without the proper licenses, from time to time, third parties have claimed and may in the future claim that we are infringing upon their intellectual property rights, and we may be found to be infringing upon such rights. See “Litigation and other proceedings” in Note 9 of Notes to Consolidated Financial Statements. In the future, we may receive claims that our application suite and underlying technology infringe or violate the claimant’s intellectual property rights. However, we may be unaware of the intellectual property rights of others that may cover some or all of our technology or application suite. Any claims or litigation could cause us to incur significant expenses and, if successfully asserted against us, could require that we pay substantial damages or ongoing royalty payments, prevent us from offering our technology or services, or require that we comply with other unfavorable terms. We may also be obligated to indemnify our customers or business partners in connection with any such litigation and to obtain licenses, modify products, pay royalties, or refund fees, which could further exhaust our resources. In addition, we may pay substantial settlement costs to resolve claims or litigation. Even if we were to prevail in the event of claims or litigation against us, any claim or litigation regarding our intellectual property could be costly and time-consuming and divert the attention of our management and key personnel from our business operations.

We May Be Required to Record Additional Impairment Charges in Future Quarters as a Result of the Decline in Value of Our Investments in Auction Rate Securities (“ARS”).

We hold a variety of interest bearing ARS that represent investments in pools of assets, including student loans, commercial paper and credit derivative products. These ARS investments are intended to provide liquidity via an auction process that resets the applicable interest rate at predetermined calendar intervals, allowing investors to either roll over their holdings or gain immediate liquidity by selling such interests at par. The continuing uncertainties in the credit markets have affected all of our holdings in ARS investments and auctions for our investments in these securities have failed to settle on their respective settlement dates. Consequently, the investments are not currently liquid and we will not be able to access these funds until a future auction of these investments is successful or a buyer is found outside of the auction process. Contractual maturity dates for these ARS investments range from 2016 to 2047 with principal distributions occurring on certain securities prior to maturity.

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The valuation of our ARS, along with the rest of our investment portfolio, is subject to uncertainties that are difficult to predict. Factors that may impact its valuation include changes to credit ratings of the securities as well as to the underlying assets supporting those securities, rates of default of the underlying assets, underlying collateral value, discount rates and ongoing strength and quality of market credit and liquidity.

Although we currently are not soliciting offers to sell these ARS investments prior to recovery nor are we aware of any factors that would make such a sale of the ARS investments more likely than not, if the current market conditions deteriorate further, or the anticipated recovery in market values does not occur, we may be required to record additional unrealized losses in other comprehensive income (loss) or to record all current and any future unrealized losses as a charge in our statement of operations in future quarters. See Note 6 of Notes to Consolidated Financial Statements for additional information about the potential adverse impact of our investments in ARS.

We May Incur Goodwill Impairment Charges that Adversely Affect Our Operating Results.

We review goodwill for impairment annually and more frequently if events and circumstances indicate that the asset may be impaired and that the carrying value may not be recoverable. Factors we consider important that could trigger an impairment review include, but are not limited to, significant underperformance relative to historical or projected future operating results, significant changes in the manner of use of the acquired assets or the strategy for our overall business, significant negative industry or economic trends, a significant decline in our stock price for a sustained period, and decreases in our market capitalization below the recorded amount of our net assets for a sustained period. Our stock price is highly volatile. The balance of goodwill is $482.8 million as of September 30, 2011, and there can be no assurance that future goodwill impairments will not occur.

Our Stock Price Is Highly Volatile and the Market Price of Our Common Stock May Decrease in the Future.

Our stock price has fluctuated dramatically. There is a significant risk that the market price of our common stock will decrease in the future in response to any of the following factors, including those discussed in other risk factors, some of which are beyond our control:

We Are at Risk of Further Securities Class Action Litigation Due to Our Stock Price Volatility.

In the past, securities class action litigation has often been brought against companies following periods of volatility in the market price of their securities. We have experienced significant volatility in the price of our stock over the past years. 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.

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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 rights of our technology. To protect our proprietary technology, we rely primarily on a combination of contractual provisions, including customer licenses that restrict use of our products, confidentiality agreements and procedures, and patent, copyright, trademark and trade secret laws. As of September 30, 2011, we have 55 patents issued in the United States of America, but may not develop other proprietary products that are patentable. Despite our efforts, we may not be able to adequately protect our proprietary rights, and our competitors may independently develop similar technology, duplicate our products or design around any patents issued to us. This is particularly true because some foreign laws do not protect proprietary rights to the same extent as those of the United States of America and, in the case of our solutions, because the validity, enforceability and type of protection of proprietary rights in these technologies are uncertain and evolving. If we fail to adequately protect our proprietary rights, we may lose customers.

In addition, we may need to commence litigation or take other actions to protect our intellectual property rights. These lawsuits and other potential litigation and actions brought by us could be costly, time-consuming and distracting to management and could result in the impairment or loss of portions of our intellectual property. Furthermore, our efforts to enforce our intellectual property rights may be met with defenses, counterclaims and countersuits attacking the validity and enforceability of our intellectual property rights.

We Rely on Third-Party Technology for Our Solutions which Might Not be Available to Us in the Future.

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 ERP, database, human resource and other systems software vendors in order to ensure compliance of our products with their management systems. In addition, we rely on technology that we license from third parties, including software that is integrated with internally developed software and used in our software products to perform key functions. If we are unable to continue to license any of this software on commercially reasonable terms, or at all, we will face delays in releases of our software until equivalent technology can be identified, licensed or developed, and integrated into our current products or require us to satisfy indemnification obligations to our customers. These delays, if they occur, could adversely affect our business.

If Our Security Measures Fail or Unauthorized Access to Customer Data Is Otherwise Obtained, Our Solutions May Be Perceived As Not Being Secure, Customers May Curtail or Stop Using Our Solutions, And We May Incur Significant Liabilities.

Our operations involve the storage and transmission of our customers’ confidential information, and security breaches could expose us to a risk of loss of this information, litigation, indemnity obligations and other liability. If our security measures are breached as a result of third-party action, employee error, malfeasance or otherwise, and, as a result, someone obtains unauthorized access to our customers’ data, our reputation will be damaged, our business may suffer and we could incur significant liability. Because techniques used to obtain unauthorized access or to sabotage systems change frequently and generally are not recognized until launched against a target, we may be unable to anticipate these techniques or to implement adequate preventative measures. If an actual or perceived breach of our security occurs, the market perception of the effectiveness of our security measures could be harmed and we could lose potential revenues and existing customers.

Further, because our products transmit data and information belonging to our customers, many customers and prospects require us to meet specific security standards or to maintain security certifications with respect to our products and operations. Given the complexity of our business and the costs and efforts required to meet the high standards to maintain these security certifications, there is no guarantee that we can achieve or maintain any such certifications or standards. If we fail to meet the standards for these security certifications, it could negatively impact our ability to attract new or keep existing customers and it could seriously harm our business.

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Because Our Application Suite Collects, Stores and Reports Personal Information of Buyers and Suppliers, Privacy Concerns Could Result in Liability to Us or Inhibit Sales of Our Application Suite.

Many federal, state and foreign government bodies and agencies have adopted or are considering adopting laws and regulations regarding the collection, use and disclosure of third-party information. In addition to government regulation, privacy advocacy and industry groups may propose new and different self-regulatory standards that apply to us. Because many of the features of our application suite collect, store and report on information about buyers and suppliers, any inability to adequately address privacy concerns, even if unfounded, or comply with applicable privacy or data protection laws, regulations and policies, could result in liability to us, damage our reputation, inhibit sales and harm our business.

Business Disruptions Could Affect Our Operating Results.

A significant portion of our research and development activities and certain other critical business operations is concentrated in a few geographic areas. We are a highly automated business and a disruption or failure of our systems could cause delays in completing sales and providing services. A major earthquake, fire or other catastrophic event that results in the destruction or disruption of any of our critical business or information technology systems could severely affect our ability to conduct normal business operations and, as a result, our future operating results could be materially and adversely affected.

Defects or Disruptions in Our Solutions Could Diminish Demand for Our Solutions and Subject Us to Substantial Liability.

Since our customers use our solutions for important aspects of their business, any errors, defects, disruptions in service or other performance problems with our solutions could hurt our reputation and may damage our customers’ businesses. If that occurs, customers could elect to terminate or not to renew their subscriptions, delay or withhold payment to us, or make warranty or other claims against us. In addition, it could adversely affect our ability to attract new customers. Our business will be harmed if our customers and potential customers believe our solutions are unreliable.

We Are Subject to Evolving Corporate Governance Regulations and Requirements. Our Failure to Adequately Adhere to These Requirements or the Failure or Circumvention of Our Controls and Procedures Could Seriously Harm Our Business and Results of Operations.

Because we are a publicly-traded company, we are subject to certain federal, state and other rules and regulations, including those required by the Sarbanes-Oxley Act of 2002 and the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”). Compliance with existing regulations is costly and requires a significant diversion of management time and attention, particularly with regard to our disclosure controls and procedures and our internal control over financial reporting. Although we have reviewed our disclosure and internal controls and procedures in order to determine whether they are effective, our controls and procedures may not be able to prevent fraud or other errors in the future. Faulty judgments, simple errors or mistakes, or the failure of our personnel to adhere to established controls and procedures may make it impossible for us to ensure that the objectives of the control system are met. A failure of our controls and procedures to detect fraud or other errors could seriously harm our business and results of operations. The recently adopted Dodd-Frank Act will subject us to significant additional executive compensation and corporate governance requirements, including solicitation of stockholder approval on an advisory basis of our executive compensation and the frequency of approval of our executive compensation at our 2012 annual meeting of stockholders. Compliance with their requirements may be costly and adversely affect our business.

Anti-takeover Provisions in Our Charter Documents and Delaware Law Could Discourage, Delay or Prevent a Change in Control of Our Company and May Affect the Trading Price of Our Common Stock.

Certain anti-takeover provisions in our certificate of incorporation and bylaws and certain provisions of Delaware law may have the effect of delaying, deferring or preventing a change in control of the Company

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without further action by our stockholders, may discourage bids for our common stock at a premium over the market price of our common stock and may adversely affect the market price of our common stock and other rights of our stockholders.

Not applicable.

Ariba occupies four principal office locations in Sunnyvale, California; Bangalore, India; Pittsburgh, Pennsylvania and Atlanta, Georgia.

Operations at our corporate headquarters in Sunnyvale, California consist principally of marketing, research and development and some administrative activities. We occupy approximately 86,000 square feet of office space in Sunnyvale under a lease that expires in November 2021.

We occupy approximately 80,000 square feet of office space in Bangalore, India under leases that expire at various times through September 2014. Our operations at this location consist principally of research and development activities.

We occupy approximately 73,000 square feet of office space in Pittsburgh, Pennsylvania under a lease that expires in December 2017. Our operations at this location consist principally of our customer support organization and administrative activities.

We occupy approximately 42,000 square feet of office space in Atlanta, Georgia under a lease that expires in June 2013. Our operations at this location consist principally of our sales, certain executive management and support activities.

We also lease several North American sales and support offices throughout the United States, Canada and Mexico. We lease international sales and support offices, including offices in Australia, Belgium, Brazil, Chile, China, Czech Republic, France, Germany, Hong Kong, India, Ireland, Italy, Japan, Netherlands, Peru, Singapore, Slovakia, South Africa, Spain, Sweden, Switzerland and the United Kingdom.

We may add additional offices in the United States and in other countries as growth opportunities present themselves, as well as from time to time abandon locations that are no longer required to meet the needs of our business.

Litigation and other proceedings

Patent litigation

In June 2011, two of the Company’s subsidiaries, Quadrem International Ltd. (“QIL”) and Quadrem Netherlands, B.V. (“QNBV”), were sued for patent infringement in the United States District Court for the Southern District of Texas. The former ultimate parent holding company of QIL and QNBV was also named as a defendant in the suit. At least 17 other entities were named as defendants in the suit. In August 2011, QIL and QNBV reached a settlement with plaintiff, which was not material to the consolidated financial statements, and the matter has been dismissed.

In December 2010, the Company’s subsidiary, Quadrem U.S., Inc. (“Quadrem U.S.”), was sued for patent infringement in the United States District Court for the Middle District of Pennsylvania. At least 10 other defendants were named as defendants in the suit. In October 2011, Quadrem U.S. was dismissed from the case.

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General

From time to time, the Company is involved in a variety of claims, suits, investigations, and proceedings arising from the ordinary course of its business, including actions with respect to intellectual property claims, government investigations, labor and employment claims, breach of contract claims, tax, and other matters. Regardless of the outcome, these proceedings can have an adverse impact on the Company because of defense costs, diversion of management resources, and other factors. In addition, it is possible that an unfavorable resolution of one or more such proceedings could in the future materially and adversely affect our financial position, results of operations, and cash flows in a particular period or subject the Company to an injunction that could seriously harm its business. See the risk factors “Litigation Could Seriously Harm Our Business,” “We May be Sued by Third Parties for Alleged Infringement of Their Proprietary Rights,” “If the Protection of Our Intellectual Property Is Inadequate, Our Competitors May Gain Access to Our Technology, and We May Lose Customers” and “We Could Be Subject to Potential Claims Related to Our On-Demand Solutions, As Well As Our Supplier Networks,” in the Risk Factors section of Part I, Item 1A of this Annual Report on Form 10-K.

Litigation benefit and insurance reimbursement

During the year ended September 30, 2010, the Company received $7.0 million in satisfaction of a court judgment, which was recorded in income.

During the year ended September 30, 2009, the Company recorded $7.5 million of income related to an insurance reimbursement for previously unreimbursed litigation costs.

Indemnification

The Company sells software licenses, access to its on-demand offerings and/or services to its customers under various different contracts (collectively, “Software License and Service Agreements,” or “SLSA”). Each SLSA contains the relevant terms of the contractual arrangement with the customer, and may include provisions for indemnifying the customer against losses, expenses and liabilities from damages that may be incurred by or awarded against the customer in the event the Company’s software or services are found to infringe upon a patent, copyright, trade secret, trademark or other proprietary right of a third party. The SLSA generally limits the scope of remedies for such included indemnification obligations in a variety of industry-standard respects, including but not limited to certain product usage limitations and geography-based scope limitations, and a right to replace an infringing product or service or modify them to make them non-infringing. If the Company cannot address the infringement by replacing the product or service, or modifying the product or service, the Company may be allowed to cancel the license or service and return certain of the fees paid by the customer.

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PART II

Market for Our Common Stock

Our common stock is traded on the Nasdaq Global Market under the symbol “ARBA.” The price range per share in the table below reflects the highest and lowest sale prices for our stock as reported by the Nasdaq Global Market for each quarter during the last two fiscal years. Our present policy is to retain earnings, if any, to finance future growth. We have never paid cash dividends and have no present intention to pay cash dividends. As of October 31, 2011, there were approximately 909 stockholders of record.

Equity Compensation Plan Information

The following table sets forth as of September 30, 2011 certain information regarding our equity compensation plans.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

We have granted shares of restricted common stock that allow statutory tax withholding obligations incurred upon vesting of those shares to be satisfied by forfeiting a portion of those shares to us. The following table shows the shares acquired by us upon forfeiture of restricted shares during the quarter ended September 30, 2011.

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ISSUER PURCHASES OF EQUITY SECURITIES

Stock Performance Graphs and Cumulative Total Return

The graph below compares the cumulative total stockholder return on our common stock with the cumulative total return on the Morgan Stanley Technology Index and the Standard and Poor’s 500 Index (the “S&P 500 Index”), for each of the last five fiscal years ended September 30, 2011, assuming an investment of $100 at the beginning of such period and the reinvestment of any dividends, if any. The comparisons in the graphs below are based upon historical data and are not indicative of, nor intended to forecast, future performance of our common stock.

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The following selected consolidated financial data should be read in conjunction with the consolidated financial statements, the notes to the consolidated financial statements, and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” which are included elsewhere in this Form 10-K. The consolidated statements of operations data for each of the five fiscal years in the period ended September 30, 2011, and the consolidated balance sheet data as of the end of each such fiscal year, are derived from our consolidated financial statements. The operating results for any period should not be considered indicative of results for any future period.

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See Note 12 of Notes to Consolidated Financial Statements for an explanation of the determination of the number of shares used to compute basic and diluted net income (loss) per share. We have paid no cash dividends during the five-year period ended September 30, 2011.

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The following discussion contains forward-looking statements, including, without limitation, our expectations regarding our outlook and future revenues. Our actual results may differ significantly from those projected in the forward-looking statements. Factors that might cause future actual results to differ materially from our recent results or those projected in the forward-looking statements include, but are not limited to, those discussed in the section entitled “Risk Factors” in Part I, Item 1A of this Annual Report on Form 10-K and in “Outlook for Fiscal Year 2012” in this section. We assume no obligation to update the forward-looking statements or our risk factors after the date of this document.

Overview of Our Business

Ariba is the leading provider of collaborative business commerce solutions for buying and selling goods and services. Ariba combines industry-leading software as a service (“SaaS”) technology to optimize the complete commerce lifecycle and enables companies to discover, connect and collaborate with a global network of trading partners and expert capabilities to augment internal resources and skills, delivering everything needed to control costs, enhance operational efficiencies, minimize risk, improve profits and enhance cash flow—all in the Ariba^® Commerce Cloud. Over 700,000 companies, including more than half of the Fortune 500 as well as major global companies, are enabled on Ariba’s solutions to drive more efficient inter-enterprise commerce.

Our software is built to leverage the Internet and provide enterprises with real-time access to their business data and their business partners. Our software is designed to integrate with all major platforms and can be accessed via a web browser. Today, our software is primarily provided as a service in an on-demand model, and in some instances, deployed as an on-premise application. In addition to application software, Ariba’s collaborative business commerce solutions include implementation and strategic consulting services, education and training. Ariba’s collaborative business commerce solutions also integrate with and leverage our supplier networks. Our supplier networks are scalable Internet infrastructures that connect our buying organizations with their suppliers to exchange product and service information as well as a broad range of business documents, such as purchase orders and invoices.

Business Model

Ariba Business Commerce solutions are delivered in a flexible manner, depending upon the needs and preferences of the customer. We offer flexible, highly configurable and easy-to-use technology and related services that are primarily delivered as an on-demand multi-tenant service and in some instances deployed on a single tenant basis either hosted or behind the firewall.

We have aligned our business model with the way we believe customers want to purchase and deploy business commerce solutions. Customers may generally subscribe to our software products for a specified term and pay for services on a time-and-materials, fixed fee or milestone basis, depending upon their business requirements. Our revenue is comprised of subscription and maintenance fees, and services and other fees. Subscription and maintenance revenue consists of subscription fees charged for hosted on-demand software solutions, single tenant software subscriptions, as well as maintenance fees for product updates and support. Services and other revenue consists of fees for implementation services, consulting services, managed services, training, education, premium support, and other miscellaneous items.

Due to the different treatment of our revenue streams under applicable accounting guidance, each type of revenue has a different impact on our consolidated financial statements. Subscription fees for multi-tenant and single-tenant subscription software solutions are generally fixed for a specific period of time, and revenue is recognized ratably over the term. In addition, certain network fees are based on transaction volumes and recognized as the transactions occur. Similarly, maintenance fees are generally fixed for a specific period of time, and revenue is customarily recognized ratably over the maintenance term. Most of our customers renew their

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maintenance contracts annually to continue receiving product updates and product support. Given the ratable revenue recognition and historically high renewal rates of our subscription and maintenance agreements, this revenue stream has generally been stable over time. Services revenues are driven by a contract, project or statement of work, in which the fees may be fixed for specific services to be provided over time or billed on a time and materials basis.

These different revenue streams also carry different gross margins. Revenue from subscription and maintenance fees tends to be higher-margin revenue with gross margins typically around 75% to 80%. Subscription and maintenance fees are generally based on software products developed by us, which carry minimal marginal cost to reproduce and sell. Revenue from labor-intensive services and other fees tends to be lower-margin revenue, with gross margins typically in the 20% to 40% range. Our overall gross margins could fluctuate from period to period depending upon the mix of revenue. For example, a period with a higher mix of subscription revenue versus services revenue would drive overall gross margin higher and vice versa.

Overview of Fiscal Year 2011

On November 15, 2010, we sold our sourcing services and business process outsourcing services assets (collectively, the “Sourcing Services Business”) to Accenture. Accordingly, the Sourcing Services Business has been reported as discontinued operations for all periods presented. See Note 2 of Notes to Consolidated Financial Statements.

On January 27, 2011, we acquired the business of Quadrem International Holdings, Ltd. This business (“Quadrem”) consists of a global electronic marketplace to facilitate the procurement of goods and services by companies from their supplier communities. Quadrem’s results of operations have been included in our consolidated financial statements from the acquisition date. See Note 3 of Notes to Consolidated Financial Statements.

Our revenues increased to $443.8 million in the year ended September 30, 2011 compared to $320.4 million in the year ended September 30, 2010. This was an increase of $123.4 million, or 39%, including 18% organic growth. Subscription and maintenance revenues increased $94.3 million. Subscription revenues increased $101.7 million, or 58%, including 27% organic growth. Services and other revenues increased $29.1 million, or 37%, including 24% organic growth. Our organic growth, which excludes revenues related to the acquisition of Quadrem, reflects increased demand for our subscription software products; increased network revenues due to higher volumes, more chargeable relationships and a pricing modification; and increased services as related to our software and network businesses.

Operating expenses increased to $286.6 million in the year ended September 30, 2011 compared to $195.1 million in the year ended September 30, 2010. The increase in operating expenses is primarily the result of an increase in compensation and benefits expense related to an increase in headcount in the year ended September 30, 2011 and increased costs as a result of the acquisition of Quadrem. In summation, our total net expenses from continuing operations, including costs of revenues and other items, increased to $446.8 million in the year ended September 30, 2011 compared to $307.2 million in the year ended September 30, 2010. Combined with the increase in revenue, this resulted in a loss from continuing operations for the year ended September 30, 2011 of $3.0 million compared to income from continuing operations of $13.2 million in the year ended September 30, 2010.

Income from discontinued operations was $36.2 million, including a gain on sale of $39.2 million, in the year ended September 30, 2011 compared to $3.2 million in the year ended September 30, 2010. Discontinued operations related the sale of our Sourcing Services Business. Our net income for the year ended September 30, 2011 was $33.3 million compared to net income of $16.4 million in the year ended September 30, 2010.

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Outlook for Fiscal Year 2012

On October 19, 2011, we acquired b-process, one of the largest e-invoice networks in Europe, for approximately €35 million, a portion of which was deposited in escrow to satisfy potential indemnification claims. The acquisition will give our customers a wider geographic offering of e-invoice solutions. b-process’s results of operations will be included in our consolidated financial statements from the acquisition date.

With the increase in customer demand and continued shift in demand toward subscription software, including the network, we expect continued growth in subscription revenue in fiscal year 2012 compared to fiscal year 2011. We also expect total revenues to grow in fiscal year 2012 compared to fiscal year 2011, with growth in subscription revenues being partially offset by modest declines in maintenance revenues.

We plan to continue to carefully monitor expenses in fiscal year 2012. We expect that total expenses, excluding expenses for amortization of intangibles, stock-based compensation, restructuring costs, and transaction costs and a benefit from tax accrual reversals will grow at a similar rate as revenues. Our expense outlook includes targeted investments in our business designed to pursue revenue growth opportunities that are planned depending on economic conditions and operating results in fiscal year 2012. As a result of our revenue and expense outlooks, we anticipate improvement in our results from operations, before giving effect to these excluded expenses and benefit.

The current economic uncertainty may adversely impact our business. Although we believe that our business commerce solutions may be even more strategic to customers during adverse economic conditions, because they help companies reduce the costs of their goods and services, a weakening global economy, or decline in confidence in the economy, could, among other things, result in reduced revenues, impairment of financial and non-financial assets and reduced cash flows.

We believe that our success for fiscal year 2012 will depend largely on our ability to: (1) sell additional solutions to new and existing customers; (2) renew our subscription or time-based revenues, including on-demand software fees, maintenance fees, and fees for certain services; (3) capitalize on revenue opportunities, such as increased spend capture within existing customers and selling on-demand business commerce solutions to smaller and mid-market customers; (4) successfully integrate and manage the Quadrem and b-process businesses; and (5) retain and expand our workforce in the face of competitive hiring conditions in the technology sector.

In addition to the macro-economic impact, we believe that key risks to our revenues in fiscal year 2012 include: our ability to renew ratable revenue streams without substantial declines from prior arrangements, including subscription software, software maintenance and subscription services; our ability to generate organic growth; the overall level of information technology spending; potential declines in average selling prices; and volatility in currency exchange rates. We believe that key risks to our future operating profitability include our ability to maintain or grow our revenues and our ability to maintain adequate utilization of our services organization. We may not be successful in addressing such risks and difficulties. See “Risk Factors” in Part I, Item 1A of this Annual Report on Form 10-K for additional information.

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Results of Operations

The following table indicates the percentage of total revenues represented by line items in our consolidated statements of operations (certain items may not foot due to rounding). This data has been derived from the consolidated financial statements contained elsewhere in this Form 10-K. The operating results for any period should not be considered indicative of results for any future period. This information should be read in conjunction with the Consolidated Financial Statements and Notes thereto included elsewhere in this Form 10-K.

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Comparison of the Fiscal Years Ended September 30, 2011, 2010 and 2009

Revenues

Please refer to Note 1 of Notes to Consolidated Financial Statements and “Application of Critical Accounting Policies and Estimates” below for a description of our accounting policy related to revenue recognition.

Subscription and maintenance

Subscription revenues consist mainly of network-related software access and transaction fees and software access subscription fees. Subscription revenues for the year ended September 30, 2011 were $275.7 million, an increase of $101.7 million, or 58%, including 27% organic growth, compared $174.0 million for the year ended September 30, 2010. Our organic growth reflects increased demand for our subscription software products and increased network revenues due to higher volumes, more chargeable relationships and a pricing modification. Maintenance revenues consist primarily of Ariba Buyer and Ariba Sourcing product maintenance fees. Maintenance revenues for the year ended September 30, 2011 were $59.4 million, an 11% decrease from the $66.8 million recorded in the year ended September 30, 2010. The decrease was primarily due to a decline in on-premise application sales. We anticipate that subscription revenues will increase in the year ending September 30, 2012 compared to the year ended September 30, 2011, in part as a result of the acquisitions of Quadrem and b-process, partially offset by modest declines of maintenance revenues.

Subscription revenues for the year ended September 30, 2010 were $174.0 million, an increase of $22.8 million, or 15%, from the $151.2 million recorded in the year ended September 30, 2009. The increase was primarily due to an increase in the demand for our subscription software products and the continued growth of network revenues. Maintenance revenues for the year ended September 30, 2010 were $66.8 million, a 6% decrease from the $71.0 million recorded in the year ended September 30, 2009. The decrease was primarily due to a decline in perpetual license revenues.

Services and other

The increase in services and other revenues in the year ended September 30, 2011 compared to the year ended September 30, 2010 included 24% organic growth. Our organic growth reflects increased services as related to our software and network businesses. We anticipate that services and other revenues will increase in the year ending September 30, 2012 compared to the year ended September 30, 2011, in part as a result of the acquisitions of Quadrem and b-process. The increase in services and other revenues in the year ended September 30, 2010 compared to the year ended September 30, 2009 was primarily attributable to increase in implementation revenues.

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Cost of Revenues

Subscription and maintenance

Cost of subscription and maintenance revenues consists of labor costs for hosting services and technical support, including stock-based compensation costs and facilities and equipment costs. The increase in cost of subscription and maintenance revenues in fiscal years 2011 and 2010 was primarily the result of an increase in set-up costs and hosted support costs associated with the overall 58% and 15% increase in subscription revenues in the respective years. We anticipate that cost of subscription and maintenance expenses will remain relatively consistent as a percentage of revenues in the year ending September 30, 2012 compared to the year ended September 30, 2011.

Services and other

Cost of services and other revenues consists of labor costs for consulting services, including stock-based compensation costs, training personnel, facilities and equipment costs. The increase in cost of services and other revenues in fiscal years 2011 and 2010 was primarily the result of an increase in deployment costs associated with the increase in services and other revenues. We anticipate that cost of services and other revenues will remain relatively consistent as a percentage of services and other revenues in the year ending September 30, 2012 compared to the year ended September 30, 2011.

Amortization of acquired technology and customer intangible assets

Amortization of acquired technology and customer intangible assets represents the amortization of assets associated with our acquisition of Quadrem and fiscal year 2008 acquisition of Procuri, Inc. (“Procuri”). The increase in the year ended September 30, 2011 compared to the year ended September 30, 2010 was due to the acquisition of Quadrem. The decrease in the year ended September 30, 2010 compared to the year ended September 30, 2009 was primarily attributable to assets reaching the end of their estimated useful lives. We anticipate amortization of acquired technology and customer intangible assets will increase in the year ending September 30, 2012 compared to the year ended September 30, 2011 due to the acquisitions of Quadrem and b-process.

Gross profit

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Our gross profit as a percentage of revenues for the year ended September 30, 2011 was 64% compared to 66% for the year ended September 30, 2010. The decrease was primarily due to the increase in amortization of acquired technology and customer intangible assets associated with our acquisition of Quadrem. Our gross profit as a percentage of revenues for the year ended September 30, 2010 was 66%, relatively consistent with 67% for the year ended September 30, 2009.

Operating Expenses

Sales and marketing

Sales and marketing includes costs associated with our sales, marketing and product marketing personnel and consists primarily of compensation and benefits, which includes salaries, benefits, commissions, bonuses, and stock-based compensation; promotional and advertising and travel and entertainment expenses related to these personnel; and the provision for doubtful accounts. Sales and marketing expenses increased in the year ended September 30, 2011 compared to the year ended September 30, 2010 primarily due to the following: (1) increased compensation and benefits of $36.9 million related to an increase in overall sales and marketing headcount, sales commission and bonus expense related to the increase in revenues noted above, restricted stock awards and the acquisition of Quadrem; (2) increased travel costs of $3.4 million related to an increase in overall sales and marketing headcount; (3) increased facilities and professional services costs of $1.1 million and $1.0 million, respectively, primarily associated with the acquisition of Quadrem; and (4) increased marketing expense of $1.1 million. We anticipate that sales and marketing expenses will remain relatively consistent as a percentage of revenues in the year ending September 30, 2012 compared to the year ended September 30, 2011.

Sales and marketing expenses increased in the year ended September 30, 2010 compared to the year ended September 30, 2009 primarily due to the following: (1) increased compensation and benefits of $15.5 million related to an increase in overall sales and marketing headcount, sales commission and bonus expense related to the increase in revenues noted above and restricted stock awards; (2) increased travel costs of $1.1 million related to an increase in overall sales and marketing headcount; and (3) increased marketing expense of $1.2 million.

Research and development

Research and development includes costs associated with the development of new products, enhancements of existing products for which technological feasibility has not been achieved and quality assurance activities, and primarily includes compensation and benefits, which includes salaries, benefits, bonuses, and stock-based compensation; consulting costs; and the cost of software development tools and equipment. Research and development expenses increased in the year ended September 30, 2011 compared to the year ended

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September 30, 2010 primarily due to increased compensation and benefits of $13.0 million related to an increase in overall research and development headcount, restricted stock awards and the acquisition of Quadrem. We anticipate that research and development expenses will remain relatively consistent as a percentage of revenues in the year ending September 30, 2012 compared to the year ended September 30, 2011. The slight increase in the year ended September 30, 2010 compared to the year ended September 30, 2009 was primarily due to an increase in compensation and benefits expense.

General and administrative

General and administrative expenses include costs for executive, finance, human resources, information technology, legal and administrative support functions, and primarily includes compensation and benefits, which includes salaries, benefits, bonuses, and stock-based compensation and professional services costs. General and administrative expenses increased in the year ended September 30, 2011 compared to the year ended September 30, 2010 primarily due to the following: (1) increased compensation and benefits of $12.2 million related to an increase in overall general and administrative headcount associated with the acquisition of Quadrem and restricted stock awards; (2) increased facilities costs of $4.4 million, primarily associated with the acquisition of Quadrem; and (3) a $3.1 million benefit in the year ended September 30, 2010 based upon management’s assessment that a previously accrued contingency had less than a remote probability of potential loss. We anticipate that general and administrative expenses will remain relatively consistent as a percentage of revenues in the year ending September 30, 2012 compared to the year ended September 30, 2011.

General and administrative expenses decreased in the year ended September 30, 2010 compared to the year ended September 30, 2009 primarily due to the following: (1) an impairment of $4.3 million in the year ended September 30, 2009 associated with capitalized costs related to an enterprise resource planning (“ERP”) system for finance and human resources; (2) a decrease in expenses of $3.1 million based upon management’s assessment that a previously accrued contingency had less than a remote probability of potential loss; and (3) a decrease in intellectual property related legal expenses of approximately $1.7 million, which were partially offset by an increase in compensation and benefits of $3.2 million primarily related to an increase in overall general and administrative headcount and restricted stock awards.

Litigation benefit and insurance reimbursement

During the year ended September 30, 2010, we received $7.0 million in satisfaction of a court judgment, which was recorded in income.

During the year ended September 30, 2009, we recorded $7.5 million of income related to an insurance reimbursement for previously unreimbursed litigation costs.

Amortization of other intangible assets

Amortization of other intangible assets consisted of the amortization of trade name/trademark and non-competition agreement associated with our acquisition of Quadrem and fiscal year 2008 acquisition of Procuri and our fiscal year 2004 business combination with FreeMarkets. The increase in the year ended September 30, 2011 compared to the year ended September 30, 2010 was due to the acquisition of Quadrem. The decrease in the year ended September 30, 2010 compared to the year ended September 30, 2009 was primarily attributable to assets reaching the end of their estimated useful lives. We anticipate amortization of other intangible assets will increase in the year ending September 30, 2012 compared to the year ending September 30, 2011 due to the acquisitions of Quadrem and b-process.

Restructuring costs

We recorded restructuring costs of $10.7 million in the year ended September 30, 2011, comprised of $12.3 million of lease abandonment costs and $3.3 million of accelerated depreciation as a result of moving our

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headquarters within Sunnyvale, California and abandoning our previous headquarters facility on Eleventh Avenue, partially offset by benefits of $4.9 million as a result of entering into agreements to sublease approximately 175,000 square feet of space at our Eleventh Avenue facility, the majority of which expire in January 2013.

We recorded a restructuring charge of $8.6 million in the year ended September 30, 2010 due to the revision of our estimates for sublease commencement dates based on the remaining terms of the lease in Sunnyvale, California and continued soft market conditions in the Northern California real estate market.

We recorded a restructuring charge of $10.2 million in the year ended September 30, 2009. During the year, we revised our estimates for sublease commencement dates and sublease rental rate projections to reflect continued soft market conditions in the Northern California real estate market, resulting in a charge of $6.8 million. The remaining charge of $3.4 million is related to severance benefit costs in connection with workforce reductions in the current economic environment to better align our expenses with our revenues.

Interest and other income (expense), net