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SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No. 1)

Filed by the Registrant  þ                             Filed by a Party other than the Registrant  ¨

Check the appropriate box:

ARIBA, INC.

(Name of Registrant as Specified in its Charter)

(Name of Person(s) Filing Proxy Statement if Other Than the Registrant)

Payment of Filing Fee (Check the appropriate box)

Title of each class of securities to which transaction applies:

Aggregate number of securities to which transaction applies:

Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined):

Proposed maximum aggregate value of transaction:

Total fee paid:

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Explanatory Note

The purpose of this Amendment No. 1 is to modify the first sentence of the second full question-and-answer on page Q-2 to read as follows: “We currently expect the merger to be completed in the fourth quarter of calendar year 2012.” This sentence replaces language from the preliminary proxy statement that was inadvertently included in the previously filed definitive proxy statement. Other than this change, this revised proxy statement is in all respects identical to the original definitive proxy statement previously filed.

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ARIBA, INC.

910 Hermosa Court

Sunnyvale, California 94085

July 24, 2012

Dear Stockholder:

You are cordially invited to attend a special meeting of stockholders of Ariba, Inc. (“Ariba” or “we,” “us,” or “our”) to be held on August 29, 2012, at 8:00 a.m., local time, at the offices of Gunderson Dettmer Stough Villeneuve Franklin & Hachigian, LLP, 1200 Seaport Boulevard, Redwood City, California 94063.

At the special meeting, you will be asked to consider and vote upon a proposal to adopt a merger agreement by and among SAP America, Inc., Angel Expansion Corporation, a wholly-owned subsidiary of SAP America, and Ariba.

If the merger agreement is adopted and the merger is completed, Ariba will become a wholly-owned subsidiary of SAP America and each share of Ariba common stock that you own as of the date of the merger will be converted into the right to receive $45.00 in cash, without interest and less any applicable withholding taxes (unless you have properly and validly perfected your statutory rights of appraisal with respect to the merger).

Our board of directors considered a number of factors in evaluating the terms of the merger agreement and consulted with our financial advisor and legal counsel. Based on its review, our board of directors unanimously determined that the terms and conditions of the merger and the merger agreement are fair to and advisable and in the best interests of Ariba and our stockholders. Accordingly, our board of directors has unanimously approved the merger agreement, the merger and the other transactions contemplated by the merger agreement, and unanimously recommends that you vote “FOR” the adoption of the merger agreement.

The enclosed proxy statement provides detailed information about the special meeting, the merger agreement and the merger. A copy of the merger agreement is attached as Annex A to the proxy statement. We encourage you to read the proxy statement carefully in its entirety. This proxy statement is dated July 24, 2012 and is first being mailed to stockholders of Ariba on or about July 24, 2012.

Your vote is very important, regardless of the number of shares you own. The proposal to adopt the merger agreement must be approved by the holders of a majority of the shares of Ariba common stock entitled to vote at the special meeting. Only stockholders who owned shares of Ariba common stock at the close of business on July 19, 2012, the record date for the special meeting, will be entitled to vote at the special meeting.

To vote your shares, you may return your proxy card, submit a proxy via the Internet or by telephone or attend the special meeting and vote in person. If your shares are held in the name of a brokerage firm, bank, trust or other nominee, you must obtain a proxy, executed in your favor, from that record holder in order to vote at the special meeting. Even if you plan to attend the special meeting, we urge you to promptly submit a proxy for your shares via the Internet or by telephone or by completing, signing, dating and returning the enclosed proxy card.

If you fail to return your proxy or attend the special meeting and vote in person, then your shares will not be counted for determining whether a quorum is present at the special meeting and your decision not to respond will have the same effect as if you voted “AGAINST” adoption of the merger agreement. An exception to the foregoing applies with respect to shares of Ariba common stock that you hold in the Ariba 401(k) Employees’ Savings Plan. If your voting instructions are not received by August 26, 2012, the plan trustee will vote your shares in the same proportion to the way the shares held by other participants in such plan are voted, unless the plan administrator instructs the trustee to vote such shares in a different manner.

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If you attend the special meeting and wish to vote in person, you may revoke your proxy and vote in person.

Thank you for your continued support of Ariba.

Sunnyvale, California

July 24, 2012

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ARIBA, INC.

910 Hermosa Court

Sunnyvale, California 94085

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS AND PROXY STATEMENT

To the Stockholders of Ariba, Inc.:

Ariba, Inc., a Delaware corporation (“Ariba” or “we,” “us,” or “our”), will hold a special meeting of stockholders at the offices of Gunderson Dettmer Stough Villeneuve Franklin & Hachigian, LLP, 1200 Seaport Boulevard, Redwood City, California 94063, at 8:00 a.m., local time, on August 29, 2012, to consider and vote upon the following proposals:

Only record holders of Ariba common stock at the close of business on July 19, 2012 are entitled to receive notice of, and will be entitled to vote at, the special meeting, including any adjournments or postponements of the special meeting. Your vote is important, regardless of the number of shares of Ariba common stock you own. The affirmative vote of the holders of a majority of the shares of Ariba common stock outstanding and entitled to vote on the merger agreement at the special meeting is required to adopt the merger agreement. The affirmative vote of the holders of a majority of the outstanding shares of Ariba common stock present in person or represented by proxy and entitled to vote on the compensation proposal at the special meeting and casting a vote for or against such matter is required to approve the compensation proposal. The affirmative vote of the holders of a majority of the outstanding shares of Ariba common stock present in person or represented by proxy and entitled to vote on the adjournment proposal at the special meeting is required to approve the adjournment proposal. In addition, pursuant to Ariba’s bylaws the chairman of the special meeting has the authority to adjourn the special meeting without approval of the stockholders. In the event that a quorum is not present in person or represented by proxy on the adjournment proposal at the special meeting or there are insufficient votes in favor of the adoption of the merger agreement at the time of the special meeting, we expect that the special meeting will be adjourned by the chairman of the meeting to solicit additional proxies if permitted by the merger agreement.

Under Delaware law, if the merger is completed, holders of Ariba common stock who do not vote in favor of adoption of the merger agreement will have the right to seek appraisal of the fair value of their shares as determined by the Delaware Court of Chancery. In order to exercise your appraisal rights, you must (i) submit a written demand for an appraisal of your shares prior to the stockholder vote on the adoption of the merger agreement, (ii) not vote in favor of adoption of the merger agreement and (iii) comply with other Delaware law procedures explained in the accompanying proxy statement. See “The Merger—Appraisal Rights” beginning on page 59 of the proxy statement and Annex C to the proxy statement.

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You are cordially invited to attend the special meeting in person. Whether or not you expect to attend the special meeting, please complete, date, sign and return the enclosed proxy card, or vote via the Internet or by telephone, as instructed in these materials as promptly as possible in order to ensure your representation at the special meeting. A return envelope (which is postage prepaid if mailed in the United States) is enclosed for your convenience. Even if you have voted by proxy, you may still vote in person if you attend the special meeting. Please note, however, that if your shares are held of record by a brokerage firm, bank, trust or other nominee and you wish to vote at the special meeting, you must obtain a proxy issued in your name from that record holder.

If you sign, date and return your proxy card or submit a proxy via the Internet or by telephone without indicating how you wish to vote, your proxy will be voted “FOR” the adoption of the merger agreement, “FOR” the compensation proposal and “FOR” the adjournment proposal. If you do attend the special meeting and wish to vote in person, you may revoke your proxy and vote in person. You may revoke your proxy in the manner described in the enclosed proxy statement at any time before it has been voted at the special meeting.

Our board of directors unanimously recommends that you vote “FOR” adoption of the merger agreement, “FOR” the compensation proposal and “FOR” the adjournment proposal.

The merger is described in the accompanying proxy statement, which we urge you to read carefully. A copy of the merger agreement is attached as Annex A to the proxy statement.

Sunnyvale, California

July 24, 2012

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YOUR VOTE IS IMPORTANT

Whether or not you expect to attend the special meeting, please complete, date, sign and return the enclosed proxy card, or vote via the Internet or by telephone as instructed in these materials, as promptly as possible in order to ensure your representation at the special meeting. A return envelope (which is postage prepaid if mailed in the United States) is enclosed for your convenience. Even if you have voted by proxy, you may still vote in person if you attend the special meeting. Please note, however, that if your shares are held of record by a brokerage firm, bank, trust or other nominee and you wish to vote at the special meeting, you must obtain a proxy issued in your name from that record holder.

REFERENCES FOR ADDITIONAL INFORMATION

If you have any questions about this proxy statement, the special meeting or the merger or need assistance with voting procedures, you should contact:

Ariba, Inc.

11625 Rainwater Drive

500-600 Northwinds Center, Suite 150

Alpharetta, Georgia 30009

Attention: Investor Relations

Telephone: (650) 390-1000

or

Innisfree M&A Incorporated

501 Madison Avenue

New York, New York 10022

Telephone: (877) 800-5186

(banks and brokers call collect at (212) 750-5833)

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ARIBA, INC.

PROXY STATEMENT

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QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING AND THE MERGER

The following Q&A is intended to address some commonly asked questions regarding the special meeting of stockholders and the merger. These questions and answers may not address all questions that may be important to you as an Ariba stockholder. We urge you to read carefully the more detailed information contained elsewhere in this proxy statement, the annexes to this proxy statement and the documents we refer to in this proxy statement.

Except as otherwise specifically noted in this proxy statement, “we,” “our,” “us” and similar words in this proxy statement refer to Ariba, Inc. In addition, throughout this proxy statement, we refer to Ariba, Inc., as “Ariba,” to Angel Expansion Corporation as “merger sub,” to SAP America, Inc. as “SAP” and to SAP AG as “SAP AG.”

The closing sale price of a share of Ariba common stock on The NASDAQ Global Select Market on July 17, 2012 was $44.49. You are encouraged to obtain current market quotations for Ariba common stock in connection with voting your shares.

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A copy of the full text of Section 262 of the Delaware General Corporation Law, or the “DGCL”, is included as Annex C to this proxy statement. Failure to strictly comply with the procedures set forth in Section 262 of the DGCL will result in the loss of appraisal rights.

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You should read the section entitled “The Merger—Recommendation of Ariba’s Board of Directors and Reasons for the Merger” beginning on page 32 of this proxy statement.

Ariba’s board of directors will consider the affirmative vote of the holders of a majority of the outstanding shares of Ariba common stock present in person or represented by proxy and entitled to vote on the compensation proposal at the special meeting and casting a vote for or against the compensation proposal as advisory approval of the compensation proposal, provided a quorum is present.

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If you abstain from voting, fail to cast your vote, in person or by proxy, or fail to give voting instructions to your brokerage firm, bank, trust or other nominee, it will have the same effect as a vote against the proposal to adopt the merger agreement.

If you abstain from voting, fail to cast your vote, in person or by proxy, or fail to give voting instructions to your brokerage firm, bank, trust or other nominee, it will have no effect on the compensation proposal.

If you abstain from voting, it will have the same effect as a vote against the proposal to adjourn the special meeting. If you fail to cast your vote, in person or by proxy, or fail to give voting instructions to your brokerage firm, bank, trust or other nominee, it will have no effect on the proposal to adjourn the special meeting.

Notwithstanding the above, for any shares of Ariba common stock you hold in the Ariba 401(k) Employees’ Savings Plan (the “Ariba 401(k) Plan”), if your voting instructions are not received by August 26, 2012, the plan trustee will vote your shares in proportion to the way the shares held by other participants in the Ariba 401(k) Plan are voted, unless the plan administrator instructs the trustee to vote such shares in a different manner if the plan administrator determines such action is consistent with and/or required by its fiduciary obligations under the Employee Retirement Income Security Act of 1974, as amended, which we refer to as “ERISA.”

If you are voting via the Internet or by telephone, your voting instructions must be received by the date and time indicated on the applicable proxy card(s).

Voting via the Internet, by telephone or by mailing in your proxy card will not prevent you from voting in person at the special meeting. You are encouraged to submit a proxy via the Internet, by telephone or by mail even if you plan to attend the special meeting in person, to ensure that your shares of Ariba common stock are present in person or represented at the special meeting.

If your shares are held by a brokerage firm, bank, trust or other nominee, you may direct your brokerage firm, bank, trust or other nominee to submit a proxy card by following the instructions that the brokerage

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firm, bank, trust or other nominee provides to you with these materials. If you hold shares through a brokerage firm, bank, trust or other nominee and wish to vote your shares in person at the special meeting, you must obtain a proxy from your brokerage firm, bank, trust or other nominee and present it to the inspector of elections with your ballot when you vote at the special meeting.

If you return a properly signed and dated proxy card but do not mark the box showing how you wish to vote, your shares will be voted “FOR” the proposal to adopt the merger agreement, “FOR” the compensation proposal and “FOR” the adjournment proposal.

In addition, because any shares you may hold in “street name” will be deemed to be held by a different stockholder than any shares you hold of record, shares held in “street name” will not be combined for voting purposes with shares you hold of record. To be sure your shares are voted, you should instruct your brokerage firm, bank, trust or other nominee to vote your shares that you hold in “street name.” Shares held by a corporation or business entity must be voted by an authorized officer of the entity.

For any shares of Ariba common stock you hold in the Ariba 401(k) Plan, if your voting instructions are not received by August 26, 2012, the trustee will vote your shares in proportion to the way the shares held by other participants in the Ariba 401(k) Plan are voted, unless the plan administrator instructs the trustee to vote such shares in a different manner if the plan administrator determines such action is consistent with and/or required by its fiduciary obligations under ERISA.

Written notices of revocation and other communications with respect to the revocation of any proxies should be addressed to:

Ariba, Inc.

910 Hermosa Court

Sunnyvale, California 94085

Attn: Corporate Secretary

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If you are a “street name” holder of Ariba common stock, you should contact your brokerage firm, bank, trust or other nominee to obtain instructions as to how to change or revoke your proxy.

In addition, if you sell your shares prior to the special meeting or prior to the effective time of the merger, you will not be eligible to exercise your appraisal rights in respect of the merger. For a more detailed discussion of your appraisal rights and the requirements for perfecting your appraisal rights, see “The Merger—Appraisal Rights” beginning on page 59 of this proxy statement and Annex C to this proxy statement.

If your brokerage firm, bank, trust or other nominee holds your shares in “street name,” you should also call your brokerage firm, bank, trust or other nominee for additional information.

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FORWARD-LOOKING INFORMATION

This proxy statement contains “forward-looking statements,” as defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act that are based on our current expectations, assumptions, beliefs, estimates and projections about our company and our industry. The forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as “anticipate,” “believe,” “estimate,” “expect,” “forecast,” “intend,” “plan,” “project,” “should,” “could” and similar expressions. Factors that may affect those forward-looking statements include, among other things:

We caution you that reliance on any forward-looking statement involves risks and uncertainties and that, although we believe that the assumptions on which our forward-looking statements are based are reasonable, any of those assumptions could prove to be inaccurate, and as a result, the forward-looking statements based on those assumptions could be incorrect. In light of these and other uncertainties, you should not conclude that we will achieve any plans and objectives or projected financial results referred to in any of the forward-looking statements. We do not undertake to revise any of these forward-looking statements to reflect future events or circumstances.

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MARKET PRICES AND DIVIDEND DATA

Our common stock is listed on The NASDAQ Global Select Market under the symbol “ARBA.” This table shows, for the periods indicated, the range of intraday high and low per share sales prices for our common stock as reported on The NASDAQ Global Select Market.

The following table sets forth the closing price per share of our common stock, as reported on The NASDAQ Global Select Market on May 21, 2012, the last full trading day before the public announcement of the merger, and on July 17, 2012, the latest practicable trading day before the printing of this proxy statement:

You are encouraged to obtain current market quotations for our common stock in connection with voting your shares of common stock. If the merger is consummated, there will be no further market for our common stock and our common stock will be delisted from The NASDAQ Global Select Market and deregistered under the Exchange Act.

Dividends

We did not declare or pay any cash dividends on our common stock during the three most recent fiscal years. In the event that the merger is not consummated, we would expect to retain earnings, if any, to fund the development and growth of our business and would not anticipate paying cash dividends on our common stock in the foreseeable future. In such event, our payment of any future dividends would be at the discretion of our board of directors after taking into account various factors, including our financial condition, operating results, cash needs and growth plans.

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THE SPECIAL MEETING

The enclosed proxy is solicited on behalf of our board of directors for use at the special meeting of stockholders or at any adjournment or postponement thereof.

Date, Time and Place

We will hold the special meeting at the offices of Gunderson Dettmer Stough Villeneuve Franklin & Hachigian, LLP, 1200 Seaport Boulevard, Redwood City, California 94063, at 8:00 a.m., local time, on August 29, 2012.

Purpose of the Special Meeting

At the special meeting, we will ask the holders of our common stock to (i) adopt the Agreement and Plan of Merger, dated as of May 22, 2012, by and among SAP America, Inc., a Delaware corporation (“SAP”), Angel Expansion Corporation, a Delaware corporation and wholly-owned subsidiary of SAP (“merger sub”), and Ariba, as such agreement may be amended from time to time, (ii) approve, on a non-binding advisory basis, the compensation to be paid to Ariba’s named executive officers that is based on or otherwise relates to the merger, including the agreements and understandings with Ariba pursuant to which such compensation may be paid or become payable, which we refer to as the “compensation proposal,” and (iii) approve the adjournment of the special meeting to a later date, if the chairman of the special meeting determines that it is necessary or appropriate and is permitted by the merger agreement, to solicit additional proxies if there is not a quorum present or there are not sufficient votes in favor of the adoption of the merger agreement at the time of the special meeting, which we refer to as the “adjournment proposal.”

Record Date; Shares Entitled to Vote; Quorum

Only holders of record of our common stock at the close of business on July 19, 2012, the record date, are entitled to notice of, and to vote at, the special meeting. On the record date, 98,225,012 shares of our common stock were issued and outstanding and held by approximately 860 holders of record. Holders of record of our common stock on the record date are entitled to one vote per share at the special meeting on each of the proposal to adopt the merger agreement, the compensation proposal and the adjournment proposal.

A quorum of stockholders is necessary to hold a valid stockholder meeting. Under our bylaws, a quorum is present at a meeting if the holders of a majority of the voting power of the shares of our common stock outstanding and entitled to vote generally in the election of directors are represented in person or by proxy at the meeting. In the event that a quorum is not present at the special meeting, it is expected that the special meeting will be adjourned by the chairman of the meeting to solicit additional proxies if permitted by the merger agreement. For purposes of determining the presence of a quorum, abstentions will be counted as shares present. However, broker non-votes (where a broker or nominee does not exercise discretionary authority to vote on a matter), if any, will not be counted as shares present.

Vote Required

The adoption of the merger agreement requires the affirmative vote of the holders of a majority of the shares of our common stock entitled to vote on the merger agreement at the close of business on the record date. Adoption of the merger agreement is a condition to the closing of the merger.

Approval of the compensation proposal, on a non-binding advisory basis, requires the affirmative vote of the holders of a majority of the outstanding shares of our common stock present in person or represented by proxy and entitled to vote on the compensation proposal at the special meeting and casting a vote for or against such matter, provided that a quorum is present.

Approval of the adjournment proposal requires the affirmative vote of the holders of a majority of the outstanding shares of our common stock present in person or represented by proxy and entitled to vote on the

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adjournment proposal at the special meeting. In addition, pursuant to our bylaws the chairman of the special meeting has the authority to adjourn the special meeting without approval of the stockholders. In the event that a quorum is not present in person or represented by proxy on the adjournment proposal at the special meeting or there are not sufficient votes in favor of the adoption of the merger agreement at the time of the special meeting, we expect that the special meeting will be adjourned by the chairman of the meeting to solicit additional proxies if permitted by the merger agreement.

Voting by Ariba Directors and Named Executive Officers

At the close of business on the record date, our directors and named executive officers and their affiliates owned and were entitled to vote 228,924 shares of our common stock, which represented approximately 0.23% of the shares of our outstanding common stock on that date. We expect that these directors and named executive officers will vote all of their shares of our common stock “FOR” adoption of the merger agreement, “FOR” the compensation proposal and “FOR” the adjournment proposal.

Voting of Proxies

If your shares are registered in your name, you may cause your shares to be voted at the special meeting by returning a signed proxy card or voting in person at the meeting. Additionally, you may submit a proxy authorizing the voting of your shares via the Internet at www.proxyvote.com or by telephone by calling 1-800-690-6903. You must have the enclosed proxy card available, and follow the instructions on the proxy card, in order to submit a proxy via the Internet or by telephone.

If your shares are registered in your name and you plan to attend the special meeting and wish to vote in person, you will be given a ballot at the meeting. If your shares are registered in your name, you are encouraged to submit a proxy card even if you plan to attend the special meeting in person.

Voting instructions are included on your proxy card. All shares represented by properly executed proxies received in time for the special meeting will be voted at the special meeting in accordance with the instructions of the stockholder. Properly executed proxies that do not contain voting instructions will be voted “FOR” the adoption of the merger agreement, “FOR” the compensation proposal and “FOR” the adjournment proposal; provided, however, that no proxy that is specifically marked “AGAINST” the proposal to adopt the merger agreement will be voted “FOR” the compensation proposal or “FOR” the adjournment proposal unless it is specifically marked “FOR” the compensation proposal or “FOR” the adjournment proposal, respectively.

If your shares are held in “street name” through a brokerage firm, bank, trust or other nominee, you may provide voting instructions by completing and returning the voting form provided by your nominee or via the Internet or by telephone through your nominee, if such a service is provided. To provide voting instructions via the Internet or telephone, you should follow the instructions on the voting form provided by your nominee. If you plan to attend the special meeting, you will need a proxy from your nominee in order to be given a ballot to vote the shares. If you do not return your nominee’s voting form, provide voting instructions via the Internet or by telephone through your nominee or attend the special meeting and vote in person with a proxy from your nominee, it will have the same effect as if you voted “AGAINST” the adoption of the merger agreement, and will have no effect on the compensation proposal or the adjournment proposal.

Notwithstanding the above, for any shares of Ariba common stock you hold in the Ariba 401(k) Plan, if your voting instructions are not received by August 26, 2012, the trustee will vote your shares in the same proportion to the way the shares held by the other Ariba 401(k) Plan participants are voted, unless the plan administrator instructs the trustee to vote such shares in a different manner if the plan administrator determines such action is consistent with and/or required by its fiduciary obligations under the Employee Retirement Income Security Act of 1974, as amended, which we refer to as “ERISA.”

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Revocability of Proxies

Any proxy you give pursuant to this solicitation may be revoked by you at any time before it is voted. Proxies may be revoked as follows:

If you have sent a proxy directly to Ariba, you may revoke it by:

If you have instructed a broker or nominee to vote your shares, you may revoke your proxy only by following the directions received from your broker or nominee to change those instructions.

Your attendance at the special meeting does not alone automatically revoke your proxy. If you have instructed your brokerage firm, bank, trust or other nominee how to vote your shares, the above-described options for revoking your proxy do not apply. Instead, you must follow the directions provided by your brokerage firm, bank, trust or other nominee to change your vote.

Board of Directors’ Recommendations

Our board of directors has unanimously approved the merger agreement and determined that the merger agreement and the merger are fair to and advisable and in the best interests of Ariba and its stockholders. Our board of directors unanimously recommends that Ariba stockholders (i) vote “FOR” the proposal to adopt the merger agreement, (ii) vote “FOR” the compensation proposal and (iii) vote “FOR” the adjournment proposal. See “The Merger—Recommendation of Ariba’s Board of Directors and Reasons for the Merger” beginning on page 32 of this proxy statement. Ariba stockholders should carefully read this proxy statement in its entirety for more detailed information concerning the merger agreement and the transactions contemplated by the merger agreement, including the merger. In addition, Ariba stockholders are directed to the merger agreement, which is attached as Annex A to this proxy statement.

Effect of Abstentions and Broker Non-Votes

Except as provided below for shares of Ariba common stock held in the Ariba 401(k) Plan, abstentions and shares not in attendance at the special meeting and not voted by proxy will have the same effect as a vote “AGAINST” the proposal to adopt the merger agreement. Abstentions and shares not in attendance at the special meeting and not voted by proxy will have no effect on the compensation proposal. Abstentions will have the same effect as a vote “AGAINST” the adjournment proposal, but shares not in attendance at the special meeting and not voted by proxy will have no effect on the adjournment proposal. Because brokerage firms, banks, trusts or other nominees holding shares of Ariba common stock in “street name” may not vote your shares of Ariba common stock on the adoption of the merger agreement, the compensation proposal or the adjournment proposal unless you provide instructions on how to vote, your failure to provide instructions will result in your shares not being present at the meeting and not being voted on those proposals. It is very important that ALL of our stockholders vote their shares of Ariba common stock, so please promptly complete and return the enclosed proxy card.

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For any shares of Ariba common stock held in the Ariba 401(k) Plan, if your voting instructions are not received by August 26, 2012, the plan trustee will vote your shares in the same proportion to the way the shares held by the other Ariba 401(k) Plan participants are voted, unless the plan administrator instructs the trustee to vote such shares in a different manner if the plan administrator determines such action is consistent with and/or required by its fiduciary obligations under ERISA.

Solicitation of Proxies

We are making and paying for this proxy solicitation. We have retained Innisfree M&A Incorporated to assist in the solicitation. We will pay Innisfree M&A Incorporated a fee of up to $30,000 plus a fee per phone call and reasonable out-of-pocket expenses for its assistance. We have also agreed to indemnify Innisfree M&A Incorporated against various liabilities and expenses that relate to or arise out of its solicitation of proxies. We may reimburse brokers, banks and other custodians, nominees and fiduciaries representing beneficial owners of shares for their expenses in forwarding soliciting materials to such beneficial owners. Proxies may be solicited by certain of our directors, officers and employees, personally or by telephone, facsimile or other means of communication. No additional compensation will be paid for such services.

You should not send your stock certificates with your proxy card. A letter of transmittal with instructions for the surrender of your stock certificates, if any, will be mailed to our stockholders as soon as practicable after completion of the merger.

Stockholder List

A list of our stockholders entitled to vote at the special meeting will be available for examination by any Ariba stockholder at the special meeting. For 10 days prior to the special meeting, this stockholder list will be available for inspection by any stockholder for any purpose germane to the special meeting during ordinary business hours at our corporate offices located at Ariba, Inc., 910 Hermosa Court, Sunnyvale, California 94085.

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THE COMPANIES

Ariba, Inc.

Ariba, Inc. was incorporated in Delaware in September 1996. Ariba is a leading provider of collaborative business commerce solutions for buying and selling goods and services. Ariba combines a leading software as a service, or “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. Ariba is headquartered in Sunnyvale, California, with additional sales presences in North and South America, Europe, Asia/Pacific and Australia.

Ariba’s principal executive offices are located at 910 Hermosa Court, Sunnyvale, California 94085. Ariba’s website is located at http://www.ariba.com. Ariba common stock is listed on The NASDAQ Global Select Market under the symbol “ARBA.” Reference to our website in this proxy statement does not include or incorporate by reference the information on our website into this proxy statement. Additional information regarding Ariba is contained in our filings with the SEC. See “Where You Can Find More Information” beginning on page 95 of this proxy statement.

SAP AG

SAP AG is a stock corporation (Aktiengesellschaft) incorporated under the laws of the Federal Republic of Germany. SAP AG is one of the leading international providers of enterprise application software and, based on market capitalization, is the world’s third-largest independent software manufacturer. SAP AG and its subsidiaries have more than 183,000 customers in over 130 countries and employ more than 55,000 people. SAP AG’s principal business is selling licenses for software solutions and related services.

SAP AG’s principal executive offices are located at Dietmar-Hopp-Allee 16, 69190 Walldorf, Germany and its telephone number is +49-6227-7-47474. SAP AG’s common stock is listed on the NYSE under the symbol “SAP.”

SAP America, Inc.

SAP America, Inc. (“SAP”) is a Delaware corporation, an indirectly wholly-owned subsidiary of SAP AG and the principal U.S. operating subsidiary of SAP AG. SAP AG began operating in the United States in 1988 through SAP. SAP engages in regional operations, administration, marketing, sales, consulting, training, customer support and research and development.

SAP’s principal executive offices are located at 3999 West Chester Pike, Newtown Square, Pennsylvania 19073 and its telephone number is (610) 661-1000.

Angel Expansion Corporation

Angel Expansion Corporation (“merger sub”) is a Delaware corporation and wholly-owned subsidiary of SAP, that was organized solely for the purpose of entering into the merger agreement and completing the merger and the other transactions contemplated by the merger agreement. Merger sub has not conducted any business operations other than in connection with the transactions contemplated by the merger agreement. Upon consummation of the merger, merger sub will cease to exist, and Ariba will continue as the surviving corporation.

Merger sub’s principal executive offices are located at 3999 West Chester Pike, Newtown Square, Pennsylvania 19073 and its telephone number is (610) 661-1000.

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THE MERGER

The following discussion describes material aspects of the merger. While we believe that the following description covers the material terms of the merger, the description may not contain all of the information that may be important to you. The discussion of the merger in this proxy statement is qualified in its entirety by reference to the merger agreement, which is attached as Annex A to this proxy statement and incorporated by reference into this proxy statement. We encourage you to read carefully this entire proxy statement, including the merger agreement, for a more complete understanding of the merger.

Background to the Merger

As part of the ongoing evaluation of our business and plans, our board of directors periodically considers a variety of alternatives to achieve our long-term strategic goals and enhance long-term stockholder value.

On December 1, 2011, at a regularly scheduled meeting of our board of directors, Robert Calderoni, our Chief Executive Officer, reviewed strategic developments in the SaaS industry and our business. Mr. Calderoni’s discussion highlighted consolidation in the SaaS industry and the potential strategic challenges we might face in the future. He also discussed with our board of directors proposed plans to begin a process of contacting key parties, including potential strategic partners, to better assess the changing strategic landscape in the SaaS industry and its potential impact on us.

On December 5, 2011, a representative of Morgan Stanley spoke by telephone with Mr. Calderoni to discuss strategic developments in the SaaS industry, including SAP AG’s acquisition of SuccessFactors, Inc., which we refer to as “SuccessFactors,” on December 3, 2011. Morgan Stanley has served as our long-time financial advisor and had also served as SuccessFactors’ financial advisor in its acquisition by SAP AG. During the call, Mr. Calderoni expressed interest in contacting potential strategic partners in the SaaS industry to better assess the changing strategic landscape and its potential impact on us.

On December 5, 2011, Mr. Calderoni emailed our board of directors regarding the SuccessFactors acquisition, the changing strategic landscape in the SaaS industry and its potential implications for us.

On December 6, 2011, a representative of Morgan Stanley met with a representative of Company A, a global information technology, hardware and software company, to discuss a variety of matters. During the meeting, the representative suggested that Company A consider learning more about us, given the growth of our network business and the changing strategic landscape in the SaaS industry.

On December 8, 2011, a representative of Company A contacted Mr. Calderoni to propose an in person meeting to discuss their respective businesses and developments in the software industry.

On December 15, 2011, Mr. Calderoni emailed our board of directors about recent acquisitions in the SaaS industry and the likelihood of additional consolidation in the SaaS space or affecting our business sector. Mr. Calderoni also identified potential strategic buyers of SaaS companies based on recent transactions. In addition, during the December timeframe, Mr. Calderoni also informally contacted certain of our directors, including Robert Knowling, our Lead Independent Director, and Richard Wallman, to discuss these matters.

On January 5, 2012, Mr. Calderoni met for dinner with a senior executive of Company A. They discussed their respective businesses and strategic developments in the software industry, including continued consolidation in the SaaS industry. The representative of Company A also suggested scheduling an in person meeting between representatives of the companies to enable Company A to better understand our business.

On January 10, 2012, Mr. Calderoni spoke with a representative of Morgan Stanley by telephone to request an introduction to Company B, a global information technology, hardware and software company, and on

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January 16, 2012, a representative of Morgan Stanley made an introduction to a representative of Company B by email.

On January 12, 2012, Mr. Calderoni contacted a representative of Company C, a global information technology, hardware and software company, to arrange for a meeting to discuss strategic developments in the SaaS industry and better understand Company C’s strategic initiatives in the industry.

Also on January 12, 2012, a representative of Morgan Stanley spoke with Mr. Arlen Shenkman, SAP AG’s Head of Corporate Development, by telephone. During the call, the representative from Morgan Stanley suggested that SAP AG might consider learning more about our company, given the growth of our network business, the changing strategic landscape in the SaaS industry and SAP AG’s publicly announced focus on growing its SaaS business.

On January 15, 2012, a representative of Morgan Stanley introduced Mr. Calderoni to Mr. Shenkman by email.

On January 19, 2012, Mr. Calderoni spoke by telephone with senior executives of Company B regarding their respective businesses, as well as Company B’s strategic assessment of the cloud software space. Although the purpose of the call from Mr. Calderoni’s perspective was to assist him in understanding Company B’s strategic initiatives, during the call, a representative of Company B indicated to him that Company B was unlikely to consider acquiring large SaaS companies because they did not fit its financial profile for acquisitions.

Also on January 19, 2012, Mr. Calderoni emailed our board of directors to, among other things, advise our directors that he would provide an update on the changing strategic landscape at the upcoming January 28, 2012 board meeting. Also, during the January timeframe and through the execution of the merger agreement with SAP, Mr. Calderoni continued to informally contact individual directors at various times to provide an update and solicit their advice regarding discussions with potential strategic partners.

On January 26, 2012, a representative of Company A provided Morgan Stanley with a proposed mutual non-disclosure agreement to be entered into by us. The parties negotiated the agreement, and on January 26, 2012, we and Company A executed the confidentiality agreement.

On January 28, 2012, at a regularly scheduled meeting of our board of directors, Mr. Calderoni provided an update on both strategic developments in our industry, including SAP AG’s recently announced acquisition of SuccessFactors, and the contacts that he and Morgan Stanley had begun to make with potential strategic partners. Among other things, he updated our board of directors that he (i) was planning to meet with representatives of SAP AG, (ii) had met in person with a representative of Company A and planned to schedule a follow-on meeting with representatives of Company A and (iii) had spoken with a representative of Company B who had indicated that Company B was unlikely to consider acquiring large SaaS companies. During the meeting, our board of directors expressed support for Mr. Calderoni’s ongoing assessment of the strategic landscape and instructed, as part of such ongoing assessment, that he and members of our management should continue contacting and engaging in discussions with potential strategic partners.

On February 21, 2012, Mr. Calderoni and Tim Minahan, our Chief Marketing Officer, together with a representative of Morgan Stanley, met with representatives of Company A at Company A’s offices. Messrs. Calderoni and Minahan provided representatives of Company A with information about our business, including publicly disclosed actual results to date, fiscal 2012 public guidance and our previously disclosed fiscal 2012-2014 medium-term target model. At the end of the meeting, representatives of Company A indicated that they were impressed with our business and wanted to consult with their senior management regarding Company A’s potential strategic interest in us. No proposals or discussions regarding the specific terms of a potential acquisition were discussed at the meeting.

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On February 21, 2012, Mr. Calderoni spoke by telephone with a representative of Company C regarding the SaaS industry, including the changing strategic landscape and Company C’s strategic objectives. Among other things, the representative advised Mr. Calderoni that Company C was in the process of defining its cloud software strategy and would be unlikely to consider a major strategic initiative in the SaaS industry at that time.

On March 5, 2012, Messrs. Calderoni and Minahan met in person with Bill McDermott, co-Chief Executive Officer of SAP AG, Mr. Shenkman and Dr. Chakib Bouhdary, Executive Vice President, Strategy and Business Development of SAP AG at SAP’s offices in Newtown Square, Pennsylvania. During the meeting, the parties engaged in preliminary discussions regarding their respective businesses and potential opportunities for a strategic collaboration. Messrs. Calderoni and Minahan provided SAP AG with information about our business, including publicly disclosed actual results to date, fiscal 2012 public guidance and our previously disclosed fiscal 2012-2014 medium-term target model. No proposals or discussions regarding the specific terms of a strategic collaboration or potential acquisition were discussed at the meeting.

On March 6, 2012, a representative of Morgan Stanley contacted a representative of Company D, a global software company, and Company E, a global information technology hardware and software company, to inquire if they were interested in learning more about our business. Both Company D and Company E advised Morgan Stanley that our business sector was not a strategic priority for them at the present time.

On March 9, 2012, representatives of Morgan Stanley contacted a representative of Company F, a leading software company, to inquire if Company F had an interest in learning more about our business. Company F advised Morgan Stanley that our business sector was not a strategic priority for it at the present time.

On March 12, 2012, representatives of Morgan Stanley spoke with Mr. Shenkman about the earlier meeting between SAP AG and us. Mr. Shenkman indicated that, based on the information shared by us, SAP AG may be more interested in considering a strategic collaboration with us, rather than an acquisition.

On March 21, 2012, at a regularly scheduled meeting of our board of directors, Mr. Calderoni provided an update on consolidation in the SaaS industry, including Oracle Corporation’s acquisition of Taleo Corporation, which we refer to as “Taleo,” on February 9, 2012. He also provided an overview of recent discussions that our management had engaged in with potential strategic partners, noting the February 21, 2012 meeting with representatives of Company A, the February 21, 2012 telephone call with a representative of Company C and the March 5, 2012 meeting with representatives of SAP AG. He noted that Company C had indicated it was in the process of defining its cloud strategy and was not likely to consider a major strategic initiative in the SaaS industry at the present time. During the meeting, our directors expressed support for Mr. Calderoni’s ongoing assessment of the strategic landscape and instructed Mr. Calderoni to continue contacting and engaging in discussions with potential strategic partners.

On March 25, 2012, Mr. Shenkman and Mr. Calderoni spoke by telephone. Mr. Shenkman told Mr. Calderoni that, based on SAP AG’s current assessment, SAP AG wanted to explore the possibility of acquiring us, rather than continuing discussions regarding a potential strategic collaboration. He also reviewed the steps that SAP AG would need to follow to evaluate a potential acquisition and prepare a formal proposal and indicated Mr. McDermott would call Mr. Calderoni to discuss these matters. Neither person proposed or discussed specific terms of a potential acquisition during the call.

On March 26, 2012, Mr. McDermott and Mr. Calderoni spoke by telephone. Mr. McDermott indicated SAP AG’s interest in exploring an acquisition of our company and reviewed the process SAP AG would undertake to evaluate the acquisition. He also advised Mr. Calderoni that SAP AG would be unlikely to participate in an auction or other broad sales process if it were to move forward due to the work required to evaluate and make a proposal to acquire us. At the conclusion of the call, Mr. McDermott proposed an in person meeting between representatives of SAP AG and our company. Neither person proposed or discussed specific terms of a potential acquisition during the call.

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Later in the day on March 26, 2012, Mr. Calderoni and Matthew Zack, our head of Corporate Development and Human Resources, spoke by telephone with representatives of Morgan Stanley regarding SAP AG’s potential interest in acquiring us. After that call, Messrs. Calderoni, Zack and a representative of Morgan Stanley spoke with Mr. Shenkman about SAP AG’s evaluation process, including the scope of SAP AG’s due diligence investigation, a potential timeline and the need for us and SAP AG to enter into a confidentiality agreement.

Also on March 26, 2012, Mr. Zack sent Mr. Shenkman a draft of a mutual non-disclosure agreement. From March 26 to April 2, 2012, the parties negotiated the agreement. Jones Day, outside legal counsel to SAP AG in the transaction, and David Middler, our General Counsel, participated in the negotiations.

On March 27, 2012, at a meeting of our board of directors, Mr. Calderoni again discussed consolidation trends in the SaaS industry and reviewed recent discussions with potential strategic partners. He reviewed SAP AG’s potential interest in acquiring us, including that SAP AG would be unlikely to participate in an auction or other broad sales process and that SAP AG had proposed in person meetings. In addition, Mr. Calderoni reviewed the status of discussions with representatives of Company A. After discussion, our board of directors instructed Mr. Calderoni to continue his preliminary discussions with SAP AG, including the proposed in person meeting, and with Company A, including furnishing the requested information.

On March 28, 2012, Mr. Shenkman emailed Messrs. Calderoni, Middler and Zack to arrange an in person meeting between representatives of our company and SAP AG on April 3, 2012.

On or about March 29, 2012, in anticipation of meetings with potential strategic partners, our management prepared projections of our financial results for fiscal years 2012 through 2015, using certain optimistic assumptions, which we refer to as the “management high growth case.” These projections were based on significant acceleration of growth in both our software and network businesses and assumed no execution risk. These projections further ignored the potential impact of the changing market landscape, the significant cost and uncertainty of raising capital and assumed no increase in competitive pressure. See “The Merger —Financial Projections” beginning on page 44 of this proxy statement.

On March 30, 2012, a representative of Company A advised Mr. Calderoni by telephone that Company A was continuing to evaluate a possible acquisition of our company and proposed an in person meeting between representatives of Company A and us. The representative of Company A indicated that he would contact Mr. Calderoni to schedule the meeting.

On April 2, 2012, we and SAP AG executed a confidentiality agreement containing a mutual standstill provision preventing each party, subject to certain conditions, from engaging in certain transactions affecting the other party, such as purchasing the other party’s stock or assets.

On April 2, 2012, Mr. Calderoni emailed our directors to advise them of the scheduled meeting with SAP AG. Mr. Calderoni proposed that our board of directors meet later in the week so that he could report on the meeting and provide our board of directors with an opportunity to discuss and consider, with input from management and Morgan Stanley, information regarding the SaaS industry, strategic alternatives that may be available to us and a framework for valuing our company.

On April 3, 2012, representatives of our senior management team, including Mr. Calderoni, Mr. Minahan, Mr. Zack and Ahmed Rubaie, our Executive Vice President and Chief Financial Officer, along with representatives of Morgan Stanley, met with representatives of SAP AG, including Mr. Shenkman, Sethu Meenakshisundaram, SAP AG’s Deputy Chief Technology Officer and Head of Product Architecture and Strategy, Heinz Ulrich Roggenkemper, SAG AG’s Senior Vice President of Technology Strategy, Thomas Assmann, SAG AG’s Vice President of Corporate Finance, and Monty Grey, SAP AG’s Senior Director, Corporate Development, to discuss in detail our business. The discussion included a review of the management high growth case. After the meeting, Messrs. Calderoni and Zack went to dinner with Mr. Shenkman to discuss SAP AG’s potential acquisition of us.

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On April 4, 2012, Mr. Calderoni and Mr. Shenkman spoke by telephone. Mr. Shenkman indicated that the prior day’s meetings went well and that SAP AG was working internally on next steps.

On April 5, 2012, at a meeting of our board of directors, Mr. Calderoni reported on the results of the meeting with SAP AG on April 3, 2012. Representatives of Morgan Stanley (i) reviewed the strategic landscape in the software industry and Morgan Stanley’s experience in the industry, (ii) provided a preliminary financial analysis of our company, (iii) reviewed potential strategic alternatives that might be available to us, (iv) identified other parties that might potentially be interested in a strategic transaction with us, (v) reviewed pros and cons associated with different processes, if our board of directors decided to consider a potential sale of the company, and (vi) discussed steps that we might take to prepare for the receipt of an indication of interest to be acquired. In its discussion, our board of directors considered on a preliminary basis (i) our short- and long-term business strategies, competitive landscape and market trends in the SaaS industry, (ii) potential alternatives for enhancing stockholder value, including continuing to operate on a standalone basis, which would likely include acquiring smaller SaaS companies, or alternatively, a sale of the company or other strategic transaction, and (iii) potential buyers and the potential advantages and disadvantages of contacting such potential buyers, including the need to disclose competitively sensitive information to actual or potential competitors, the risk of leaks and the risk that SAP AG might decide to not acquire us. Our board of directors concluded that the discussions with SAP AG and potential other buyers might result in a potentially attractive strategic alternative and should be further explored on a preliminary basis, but before any decisions were to be made with regard to any such strategic alternative, our board of directors, with the assistance of our management and financial and legal advisors, needed to further evaluate and consider our overall strategic prospects and alternatives.

Following this discussion, representatives of Morgan Stanley left the meeting. Our board of directors then discussed the retention of Morgan Stanley as our exclusive financial advisor in connection with a potential strategic transaction. Mr. Calderoni reviewed our relationship with Morgan Stanley, its in-depth knowledge about us and our industry sector, its reputation and the level of service it had provided in prior engagements, including our IPO and several subsequent acquisitions. He then reviewed steps taken to protect against potential conflicts arising in the future on the part of Morgan Stanley and the proposed terms and conditions of Morgan Stanley’s proposed engagement letter. After discussion, our board of directors approved the retention of Morgan Stanley as our exclusive financial advisor in the potential sale of our company. In order to facilitate timely input from our board of directors on potential strategic discussions, Mr. Calderoni also discussed the desirability of forming a transaction committee of our board of directors, which we refer to as the “transaction committee,” to assist management on an advisory basis as needed if we received an indication of interest to be acquired. No formal action was taken to form the committee at the meeting.

On April 9, 2012, Mr. Shenkman spoke by telephone with Mr. Calderoni and advised him that SAP AG planned to make a written non-binding indication of interest to acquire us for $38.50 per share.

On April 11, 2012, we formally retained Morgan Stanley to serve as our exclusive financial advisor in connection with a possible strategic transaction.

On April 11, 2012, representatives of Morgan Stanley contacted a representative of Company A to encourage it to complete its evaluation if it wanted to pursue an acquisition of us. In response, the representative of Company A indicated that he would seek to schedule an in person meeting the following week.

Later on April 11, 2012, SAP AG delivered a written, non-binding indication of interest in acquiring us for $38.50 per share in cash. The indication of interest indicated that the offer price represented a premium of 17.6% and 29.0% over the volume weighted average price, which we refer to as “VWAP,” of our common stock over the prior one and three month periods, respectively. The indication of interest was not subject to a financing condition, and indicated that SAP AG would seek the continuing commitment of certain unspecified employees and management of our company.

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On April 11, 2012, Mr. Calderoni emailed our board of directors to advise it of SAP AG’s non-binding indication of interest.

On April 12, 2012, our board of directors held a meeting to discuss SAP AG’s indication of interest. Management, and representatives of Morgan Stanley and Gunderson Dettmer Stough Villeneuve Franklin & Hachigian, LLP, which we refer to as “Gunderson Dettmer,” our long-time outside corporate counsel, attended the meeting. Gunderson Dettmer reviewed the fiduciary duties of our board of directors in connection with a potential sale of our company. Morgan Stanley (i) reviewed the terms and conditions of the non-binding indication of interest, (ii) discussed publicly available information concerning SAP AG’s key financial metrics, management and prior transactions, (iii) reviewed potential strategic alternatives that we might consider for enhancing stockholder value, (iv) reviewed the pros and cons of various process alternatives if our board of directors determined to consider a sale of our company, (v) identified other parties that might be interested in acquiring us and (vi) discussed the process that might be taken to evaluate strategic alternatives. Representatives of Morgan Stanley and Mr. Calderoni also reported on recent discussions with representatives of Company A and the status of scheduling a follow-on meeting with representatives of Company A, which our board of directors supported. Our board of directors then discussed other potential strategic partners, including those identified by Morgan Stanley, and the potential advantages and disadvantages of contacting them, including the need to disclose competitively sensitive information to actual or potential competitors, the risk of leaks and the risk that SAP AG might decide to not acquire us if we contacted other potential buyers. Our board of directors determined that Mr. Calderoni, with the assistance of Morgan Stanley, was currently engaging in discussions with the most likely potential strategic partners (Company A and SAP AG), other potential strategic partners (Companies B-F) had already advised that they were unlikely to consider acquiring us at the present time and other potential buyers considered by our board of directors appeared less likely to pursue an acquisition given their strategic priorities, recent acquisitions and/or ability to finance and undertake an acquisition of a company the size of our company.

Without representatives of Morgan Stanley present, our board of directors then discussed SAP AG’s non-binding indication of interest. Our board of directors determined that it was not likely to pursue discussions regarding a sale of the company for $38.50 per share after considering Morgan Stanley’s preliminary financial analysis of the indication of interest. Our board of directors also determined to undertake additional analysis of our strategic alternatives, including an evaluation of our business on a standalone basis, and directed our management to prepare a multi-year financial forecast based on assumptions similar to those used in preparing management’s annual projections in the ordinary course of business. We refer to this multi-year financial forecast as the “management base case.” Our board of directors also noted that SAP AG and any other potential strategic partner might want to enter into employment and/or retention agreements with members of our management and that it would need to review these arrangements. Our board of directors then established a transaction committee consisting of Mr. Calderoni and three non-employee directors, Robert Knowling, Robert Johnson and Richard Wallman. The transaction committee was formed to assist management, given its need to consult with our directors on an expedited basis during a potential sale process and not because any outside director had a conflict of interest with respect to a proposed sale of our company. Our board of directors instructed the transaction committee to provide updates to our board of directors and determined that any material decisions with respect to a strategic transaction would be made by our full board of directors. Our board of directors then instructed Mr. Calderoni to advise SAP AG that it was not likely to pursue a sale of our company at $38.50 per share but to continue discussions with SAP AG to determine if SAP AG would increase its offer price.

Also on April 12, 2012, following the meeting of our board of directors meeting, Mr. Calderoni emailed our board of directors to inform them that he had contacted Company A to schedule a follow-on meeting.

On April 13, 2012, Mr. Calderoni spoke by phone with Mr. McDermott and informed him that our board of directors had not completed its evaluation of SAP AG’s indication of interest of $38.50 per share, but he anticipated that our board of directors was not likely to pursue an indication of interest with SAP AG at that price level.

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During April, Mr. Calderoni continued to informally contact individual members of our board of directors to solicit their advice on the status of discussions with potential strategic partners.

On April 16, 2012, at the direction of our board of directions, our management completed the preparation of our management base case financial projections, consisting of our financial projections for calendar years 2012 through 2015. See “The Merger—Financial Projections” beginning on page 44 of this proxy statement.

On April 17, 2012, members of our senior management team, including Messrs. Calderoni, Rubaie, Mr. Sanish Mondkar, our head of engineering, and Mr. Zack, along with representatives of Morgan Stanley, met with representatives of Company A to discuss our business in detail. Our financial review included the management high growth case.

On April 18, 2012, representatives of Morgan Stanley again contacted representatives of Company A to follow up on the in person meeting and again encourage Company A to act quickly if it wanted to acquire us. Company A responded that it was continuing its evaluation of our company.

On April 19, 2012, our board of directors held an in person meeting. At the meeting, Morgan Stanley summarized the recent discussions between our management and SAP AG and Company A and provided an updated preliminary valuation analysis of SAP AG’s indication of interest at $38.50 per share, noting that the valuation analysis incorporated the management base case and management high growth case forecasts. Representatives of Morgan Stanley also discussed, and responded to questions of our directors regarding, (i) strategic alternatives, including primarily continuing as a standalone company or considering a sale to a third party, (ii) a potential sale process, (iii) potentially interested buyers, as an update to its review at the April 5 and 12, 2012 meetings, and (iv) potential discussion points for continued discussions with third parties. Representatives of Gunderson Dettmer again reviewed the fiduciary duties of our directors in connection with a potential sale of our company. Our board of directors then discussed our short- and long-term business strategies, our competitive landscape and market trends in the SaaS industry, noting the factors discussed below under “—Recommendation of Ariba’s Board of Directors and Reasons for the Merger; Prospects in Remaining Independent” beginning on page 33. Our board of directors also discussed recent increases in our stock price. Mr. Calderoni noted that the stock price may have been favorably impacted by a recent customer conference and public speculation that we might be an acquisition candidate due to the acquisitions of other SaaS companies, including RightNow Technologies, Inc., SuccessFactors and Taleo, which had been reinforced by a recent analyst report. Our board of directors noted that the recent price increase might result in a lower premium to be received by our stockholders if we were sold. Representatives of Morgan Stanley observed that our common stock appeared to be trading at a relatively high price as compared to the value implied by the management base case.

Without representatives of Morgan Stanley and management (other than Mr. Calderoni) present, our board of directors then discussed whether it should consider selling our company rather than continuing to operate on a standalone basis. Our board of directors unanimously determined that it should consider selling our company if it could obtain a price that would reasonably be expected to provide more value to our stockholders than continuing as a standalone company in the current and anticipated industry environment. Our board of directors further determined that a price of $38.50 per share was not acceptable. Mr. Calderoni informed our board of directors that, in accordance with its previous instructions, he had advised Mr. McDermott that our board of directors was not likely to pursue an indication of interest of $38.50 per share and had asked SAP AG to increase its proposed price He also advised our board of directors that management was continuing to engage with representatives of Company A but that Company A had made no proposals regarding an acquisition of us. Our board of directors then discussed whether to contact other potential buyers besides SAP AG and Companies A-F. Our board of directors discussed, among other factors (i) the risk of leaks and competitive harm to our company from contacting other potential buyers, (ii) management’s ongoing discussions with SAP AG and Company A, the two most likely buyers, (iii) the fact that five other potential buyers (Companies B-F) had declined to pursue strategic discussions with us, (iv) input from Morgan Stanley and our management that they had not identified other

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potential buyers that appeared likely to pay a higher price, and (v) our board of directors’ ability to preserve its right to engage in discussions with and accept proposals from unsolicited interested parties, subject to paying a termination fee, in order to accept a superior proposal, even after it had entered into a definitive merger agreement.

On April 20, 2012, Mr. Calderoni spoke by telephone with Mr. Shenkman and advised him that our board of directors was not prepared to sell the company at $38.50 per share and asked SAP AG to increase its proposed price. Later that same day, Mr. Calderoni spoke by telephone with Mr. McDermott to discuss our board of directors’ position. Mr. McDermott asked what price might be acceptable to our board of directors but Mr. Calderoni did not provide this guidance.

Also on April 20, 2012, representatives of Morgan Stanley spoke with Mr. Shenkman by telephone and advised him that our board of directors was prepared to consider a sale of our company, but that our board of directors would only consider a price that was significantly higher than $38.50 per share. Later in the day on April 20, 2012, representatives of Morgan Stanley spoke with a representative of Company A to encourage Company A to act quickly if it wanted to consider acquiring us.

On April 21, 2012, Mr. Calderoni and Mr. McDermott met in New York at a social event and acknowledged, but did not discuss the specific terms of, a potential acquisition of us by SAP AG.

On April 23, 2012, representatives from Company A requested additional diligence information from Morgan Stanley. Morgan Stanley worked with us to collect and provide the requested information and participated in a call with representatives of Company A later that week to address the diligence questions.

On April 23, 2012, Mr. Shenkman contacted Mr. Calderoni by telephone to notify him that SAP AG would be delivering an updated indication of interest to acquire us at $41.00 per share.

On April 24, 2012, SAP AG delivered a written, non-binding indication of interest to acquire us for $41.00 per share. The letter indicated that the offer price represented a premium of 20.3% and 32.3% over the one month and three month VWAPs of Ariba common stock, respectively. Representatives of J.P. Morgan Securities, LLC, which we refer to as “J.P. Morgan,” SAP AG’s financial advisor, contacted representatives of Morgan Stanley later that day to discuss the revised indication of interest.

On April 25, 2012 the transaction committee met to consider SAP AG’s revised indication of interest. Mr. Calderoni reviewed the terms of the indication of interest at $41.00 per share and provided an update on the status of discussions with Company A, noting that we had provided responsive diligence information to Company A. Representatives of Morgan Stanley then provided a preliminary financial analysis of the indication of interest, including a comparison of the potential value of our company based on the management base case and management high growth case projections.

The transaction committee then discussed whether $41.00 per share placed a value on us that would likely exceed the potential value that could be achieved if we were to continue to operate as a standalone company under a variety of scenarios, particularly in light of potential execution risks, potential consolidation in the SaaS industry and potential strategic challenges we might face in the future. The transaction committee also discussed that the then current price of our stock likely reflected a premium resulting from recent publicly discussed merger and acquisition speculation. Representatives of Morgan Stanley also provided an update on ongoing discussions with representatives of Company A, noting the April 17, 2012 meeting with Company A and that our representatives had been responding to information requests from representatives of Company A. Following a detailed discussion and consultation with our financial and legal advisors, the transaction committee determined to recommend to our board of directors that it not approve a transaction with SAP AG at $41.00 per share. The transaction committee further determined that if SAP AG would improve its offer, the transaction committee would recommend to our board of directors that it support a sale of our company to SAP AG at a price of $45.00

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per share, which it believed would be reasonably likely to provide more value to our stockholders than alternative scenarios, including another strategic alternative or continuing as a standalone company. In reaching its determination, the transaction committee noted that some valuation analyses might support a higher price under the management high growth case, but determined that there was significant risk of not achieving the management high growth case because those projections were based on certain optimistic assumptions, including (i) significant acceleration of growth in both our software and network businesses (ii) no execution risk and (iii) no potential impact from the changing market landscape, the significant cost and uncertainty of raising capital or the increase in competitive pressure. See “The Merger—Financial Projections” beginning on page 44 of this proxy statement. The transaction committee next discussed the costs and benefits of contractually agreeing with SAP AG, if requested, that we would negotiate an acquisition transaction exclusively with SAP AG for a specified period of time. The transaction committee determined to recommend to our board of directors that it might be appropriate to grant an exclusive negotiating period to SAP AG to induce SAP AG to conduct diligence and negotiate a definitive agreement, even though we would not be able engage in further discussions with other potential strategic partners during the exclusivity period. The transaction committee noted that a request for exclusive negotiations is often made by acquirors in these types of transactions and that it should be anticipated in this situation. The transaction committee then directed management to advise SAP AG that our board of directors would likely pursue an indication of interest of $45.00 per share and support a short exclusivity period. The transaction committee also directed management to continue providing Company A with additional requested due diligence materials and to emphasize to Company A the need to act quickly if it wanted to make a proposal to acquire us.

Also on April 25, 2012, Messrs. Calderoni and Mondkar met with Mr. Shenkman, Mr. Meenakshisundaram and Vishal Sikka, SAP AG’s Chief Technology Officer at Jones Day’s offices to discuss our business and the potential synergies that SAP AG might realize upon an acquisition of us.

On April 26, 2012, in response to a request by Company A, our representatives and representatives of Company A met by telephone to discuss due diligence matters resulting from its evaluation of our company.

On April 26, 2012, we held our regularly scheduled earnings release call for the quarter ended March 31, 2012. During the call, we disclosed results for the quarter that were generally above our previously announced outlook for the quarter and raised our guidance for the remainder of our fiscal year ending September 30, 2012.

On April 27, 2012, after soliciting input from representatives of Morgan Stanley, Mr. Calderoni spoke to Mr. McDermott by telephone to advise him that that our board of directors would not support a sale of our company at $41.00 per share, but that it would likely accept a price of $45.00 per share. Mr. McDermott responded that he would have to consult with SAP AG’s Executive Board before responding. Mr. McDermott also indicated SAP AG would increase its price only if we would commit to an exclusive negotiating period with SAP AG. Also on April 27, 2012, representatives of Morgan Stanley spoke with Mr. Shenkman regarding our transaction committee’s response to SAP AG’s indication of interest at $41.00 per share and next steps if the parties were to reach an agreement on price, including (i) SAP AG’s request for an exclusivity agreement, (ii) SAP AG’s required due diligence review, (iii) a timeline and work plan and (iv) a potential transaction structure.

Later on April 27, 2012, our board of directors met. Mr. Calderoni advised our board of directors of his discussion with Mr. McDermott earlier in the day and provided an update regarding recent discussions with Company A, noting that management and representatives of Morgan Stanley had on several occasions encouraged Company A to act quickly if it was interested in acquiring us. Our board of directors also discussed the increase in our stock price during the day, which rose approximately $4.00 to close at $39.35 per share. Our management and representatives of Morgan Stanley advised our board of directors that the increase appeared to be attributable to a favorable market reaction to the prior day’s earnings release call. They noted that the increase was greater than prior market reactions to favorable earnings announcements and, as a result, may also reflect recent public discussion about consolidation in the SaaS industry.

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Also on April 27, 2012, representatives of Jones Day spoke with representatives of Gunderson Dettmer to discuss the potential terms of an exclusive negotiating period as well as our non-public information that SAP AG would like to review.

On April 30, 2012, Mr. Shenkman contacted Mr. Calderoni to advise him that the SAP AG Executive Board would be meeting the next day to consider increasing SAP’s offer to $45.00 per share. On May 1, 2012, the SAP AG Executive Board met and authorized SAP AG management to increase SAP AG’s indication of interest in acquiring us to $45.00 per share. Later in the day, Mr. Shenkman called Mr. Calderoni to communicate the revised indication of interest and indicate that SAP AG would require a 20-day exclusivity period to conduct confirmatory due diligence.

On May 2, 2012, SAP AG delivered a third written, non-binding indication of interest in acquiring us at a price of $45.00 per share, which we refer to as the “Offer Price,” representing a premium of 37.6% to the closing price of our stock on April 10, 2012, the day before SAP AG’s initial indication of interest, and an implied enterprise value of approximately 7.9 times our calendar year 2012 management base case revenues. The indication of interest provided that SAP AG would require us to agree to an exclusive negotiating period until May 23, 2012 before SAP AG would proceed with its due diligence review and negotiation of definitive transaction agreements. Also on May 2, 2012, Jones Day delivered an initial draft of an exclusivity agreement providing for an exclusive negotiating period through May 23, 2012 to Gunderson Dettmer. On May 2 and 3, 2012, Jones Day and Gunderson Dettmer negotiated the exclusivity agreement.

On May 3, 2012, our board of directors met to consider SAP AG’s revised indication of interest. Representatives of Morgan Stanley reviewed the terms and conditions of the indication of interest, including the proposed exclusivity period, and provided an updated financial analysis of the indication of interest. Representatives of our management provided an update on discussions with representatives of Company A regarding its interest in acquiring us and representatives of Gunderson Dettmer provided a preliminary assessment of regulatory requirements that would apply to the proposed sale of our company to SAP AG, that had been prepared by our regulatory counsel. Following a discussion, our board of directors determined that it would be in the best interests of our stockholders to continue discussions with SAP AG on the basis of the Offer Price and to grant SAP AG a contractually binding exclusivity period for the purposes of conducting confirmatory due diligence through May 23, 2012. With input from our transaction committee, our board of directors also determined that the proposed exclusivity period was reasonable in order to induce SAP AG to engage in confirmatory diligence and negotiate a definitive acquisition agreement.

On May 3, 2012 after our board of directors meeting, a representative of Company A contacted Morgan Stanley to indicate that Company A was not prepared to consider a potential acquisition of our company at the present time based on our current valuation.

On May 3, 2012, SAP AG and we executed a final version of the exclusivity agreement, providing for an exclusive negotiation period until May 23, 2012.

On May 6, 2012, representatives of Jones Day delivered an initial draft of a merger agreement to us and representatives of Gunderson Dettmer.

On May 8, 2012, representatives of Gunderson Dettmer reviewed the terms of the initial draft of the merger agreement with our management, including the proposed scope and possible changes to the requested representations, warranties and covenants, the certainty provided by the conditions to SAP AG’s obligation to complete the acquisition, the flexibility provided to our board of directors to respond to and ultimately accept a superior acquisition proposal or change its recommendation of the merger and the size of the 4.5% termination fee proposed by SAP AG to be payable by us under certain circumstances, including upon termination of the merger agreement after our board of directors accepts a superior proposal, changes its recommendation of the merger or fails to reaffirm its recommendation of the merger and its potential deterrent effect on competing bidders.

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On May 9, 2012, representatives of Gunderson Dettmer delivered a revised draft of the merger agreement to representatives of Jones Day.

On May 10, 2012, representatives of SAP AG, JP Morgan and Jones Day met in person with representatives of our company, Morgan Stanley and Gunderson Dettmer to continue to negotiate the terms and conditions of the merger agreement. On May 12, 2012, representatives of Jones Day delivered a revised draft of the merger agreement to representatives of SAP AG, J.P. Morgan, our company, Morgan Stanley and Gunderson Dettmer.

From May 12 to 22, 2012, representatives of our company and SAP AG, assisted by their respective legal and financial advisors, engaged in continued negotiations and exchanged additional drafts of the merger agreement. During these discussions, we and SAP AG agreed to reduce the proposed breakup from 4.5% to 3.3% of equity value, modify the material adverse effect definition to provide enhanced deal certainty for us, modify the non-solicitation clause to provide increased flexibility for our board of directors to discharge its fiduciary duties in connection with a change in control of our company, including its ability to respond to competing acquisition proposals, and modify the parties covenants and conditions to closing to provide us with greater certainty that the merger would be completed and greater flexibility to operate our business during the pendency of the merger.

On May 16, 2012, at a meeting of the transaction committee, Mr. Calderoni provided an update regarding ongoing discussions with SAP AG, including the status of SAP AG’s due diligence review, key open issues in the merger agreement negotiations and various personnel and operational matters relating to the transaction. Representatives of Gunderson Dettmer also reviewed the proposed terms and conditions of the merger agreement and provided an analysis of regulatory requirements that would apply to the merger and merger agreement that had been prepared by our regulatory counsel.

Immediately afterwards on May 16, 2012, the compensation committee of our board of directors met and approved modifying certain compensation arrangements applicable to executive officers in order to provide appropriate retention incentives if we enter into an agreement to be acquired in fiscal year 2012, without regard to the date on which, or whether, the acquisition closes. See “The Merger—Interests of Ariba’s Directors and Named Executive Officers in the Merger” beginning on page 46 of this proxy statement.

On May 17 and 18, 2012, representatives of our company and SAP AG met at SAP AG’s offices in Newtown Square, Pennsylvania to discuss various personnel and communications matters relating to the proposed acquisition of our company by SAP AG.

On May 21, 2012, our board of directors met to consider the proposed merger with SAP AG. Representatives of Gunderson Dettmer (i) reviewed the proposed terms and conditions of the merger agreement and provided an analysis of regulatory requirements that would apply to the merger that had been prepared by our regulatory counsel, (ii) summarized the compensation and severance benefits that are or may be payable to members of Ariba’s management in connection with the proposed sale of Ariba, as described in “The Merger— Interests of Ariba’s Directors and Named Executive Officers in the Merger” beginning on page 46 of this proxy statement, (iii) noted that the merger agreement does not provide for officers or employees of Ariba to enter into employment, retention or severance agreements with SAP AG or any of its affiliates and (iv) reviewed Mr. Calderoni’s potential role at SAP AG following the merger. Representatives of Morgan Stanley then presented an updated financial analysis and rendered to our board of directors its oral opinion, subsequently confirmed in writing, that, as of May 21, 2012, and based upon and subject to the various assumptions, procedures, factors, qualifications and limitations set forth in the written opinion, the consideration to be received by the holders of shares of our common stock (other than the holders of certain excluded shares) pursuant to the merger agreement was fair from a financial point of view to such holders (the full text of the written opinion of Morgan Stanley, dated as of May 21, 2012, is attached as Annex B to this proxy statement and is incorporated by reference in this proxy statement in its entirety. See also “The Merger—Opinion of Ariba’s Financial Advisor” beginning on page 36 of this proxy statement.

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Throughout the meeting, our board of directors asked numerous questions of management and representatives of Gunderson Dettmer and Morgan Stanley and discussed the advantages and risks of the proposed transaction, including those described in “The Merger—Recommendation of Ariba’s Board of Directors and Reasons for the Merger” beginning on page 32 of this proxy statement. Following this discussion, our board of directors unanimously resolved to approve the merger agreement and the related matters and resolved to recommend that our stockholders adopt the merger agreement, which is attached hereto as Annex A.

On May 22, 2012, our board of directors met to review and discuss revised terms of the merger agreement sent to them after the May 21, 2012 board meeting. Following such review and discussion, our board of directors reaffirmed its resolutions adopted on May 21, 2012 and authorized and directed management to enter into the merger agreement on behalf of our company.

Later on May 22, 2012, SAP AG’s Supervisory Board approved the acquisition of our company as contemplated by the merger agreement.

Later in the day on May 22, 2012, we, SAP and merger sub executed the merger agreement and, SAP executed the merger agreement for purposes of guaranteeing the obligations of SAP and merger sub under the merger agreement. Also on May 22, 2012, SAP AG and we issued a joint press release announcing the signing of the merger agreement, following a temporary halt of trading of our common stock on The NASDAQ Global Market.

Recommendation of Ariba’s Board of Directors and Reasons for the Merger

At a meeting of our board of directors on May 21, 2012, our board of directors unanimously determined that the merger agreement and the merger are fair to and advisable and in the best interests of Ariba and its stockholders. Accordingly, our board of directors unanimously approved and declared advisable the merger agreement. Our board of directors unanimously recommends that you vote (i) “FOR” the adoption of the merger agreement, (ii) “FOR” the compensation proposal and (iii) “FOR” the adjournment proposal.

In the course of reaching its decision to approve the merger agreement, to declare that the merger agreement and the merger are fair to and advisable and in the best interests of Ariba and our stockholders and to recommend that our stockholders vote to adopt the merger agreement, our board of directors consulted with our senior management and our financial advisor, Morgan Stanley. Our board of directors also consulted with outside legal counsel regarding its fiduciary duties and the terms of the merger agreement and related matters. The following discussion includes the material reasons and factors considered by our board of directors in making its recommendation, but is not, and is not intended to be, exhaustive.

Factors considered by our board of directors weighing in favor of the merger included:

Merger Consideration. Our board of directors considered the following with respect to the merger consideration to be received by our stockholders:

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Solicitation of Interest. Our board of directors considered the fact that prior to entering into an exclusivity agreement with SAP AG, our board of directors, with the assistance of Morgan Stanley, considered other potential acquirers and solicited interest from other parties that might be potentially interested in a business combination with us, and that none of the parties contacted made any proposals with respect to an acquisition of Ariba or otherwise indicated an interest in paying as much as $45.00 per share to acquire Ariba.

Prospects in Remaining Independent. Our board of directors considered the possibility of continuing to operate Ariba as an independent public company, including the risks and uncertainties of remaining an independent public company. In considering the alternative of pursuing growth as an independent public company, our board of directors considered the following factors:

Potential Alternative Acquisition by SAP. Our board of directors considered the possibility that, if we were not to combine with SAP at this time, SAP may acquire another company in the industry and, in such event, there would be less likelihood that SAP or another potential buyer would be an interested acquirer of us in the future.

Opinion of Morgan Stanley. Morgan Stanley’s oral opinion, subsequently confirmed in writing, that as of May 21, 2012, and based upon and subject to the various assumptions, procedures, factors, qualifications and limitations set forth in its written opinion, the consideration to be received by the holders of shares of our common stock (other than the holders of certain excluded shares) pursuant to the merger agreement was fair from

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a financial point of view to such holders. (The full text of the written opinion of Morgan Stanley, dated as of May 21, 2012, is attached as Annex B to this proxy statement and is incorporated by reference in this proxy statement in its entirety.) See also “—Opinion of Ariba’s Financial Advisor” beginning on page 36 of this proxy statement.

Financial Forecasts. Our board of directors considered the financial forecasts prepared by our management and summarized below under “—Financial Projections” beginning on page 44 of this proxy statement, including the management base case projections and management high growth case projections discussed under such heading. These financial forecasts were also provided to Morgan Stanley for purposes of the opinion described in the preceding paragraph.

Terms of the Merger Agreement. Our board of directors considered the terms and conditions of the merger agreement and the course of negotiations thereof, including:

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In the course of its deliberations, our board of directors also considered a variety of risks and factors weighing against the merger, including:

Risks of Announcement and Closing. Our board of directors considered:

Limitations on Ariba’s Business. Our board of directors considered the potential limitations on our pursuit of business opportunities due to pre-closing covenants in the merger agreement whereby we agreed that it will carry on its business in the ordinary course of business consistent with past practice and, subject to specified exceptions, will not take certain actions related to the conduct of its business without the prior written consent of SAP.

Cash Transaction. Our board of directors considered that the merger consideration is cash and, as a result, our stockholders will forego any potential future increase in our value that might result from our possible growth, even if our business performed at or above the levels projected by our management in the management high growth case, and that gains realized as a result of the merger generally will be taxable to our stockholders.

Stockholder Vote. Our board of directors considered the requirement under the merger agreement that Ariba submit the proposal to adopt the merger agreement to our stockholders even if our board of directors withdraws its recommendation to our stockholders to adopt the merger agreement.

Termination Fee and Other Alternative Acquirers. Our board of directors considered the possibility that the $150.0 million termination fee payable to SAP under the circumstances set forth in the merger agreement might discourage a competing proposal to acquire Ariba or reduce the price of any such proposal.

Interests of Directors and Officers. Our board of directors considered the interests that certain of our directors and named executive officers may have with respect to the merger in addition to their interests as Ariba stockholders generally, as described in “—Interests of Ariba’s Directors and Named Executive Officers in the Merger” beginning on page 46 of this proxy statement.

The foregoing discussion is not intended to be exhaustive, but we believe it addresses the material information and principal factors considered by our board of directors in its consideration of the merger.

In light of the variety of factors considered in connection with its evaluation of the merger and the complexity of these matters, our board of directors did not find it practicable to, and did not, quantify or otherwise attempt to assign relative weights to the various factors considered in reaching its determination, and

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individual directors may have given different weight to different factors. In addition, our board of directors did not reach any specific conclusion with respect to any of the factors or reasons considered. Instead, our board of directors conducted an overall analysis of the factors and reasons described above and determined that, in the aggregate, the potential benefits considered outweighed the potential risks or possible negative consequences of approving the merger agreement and accordingly recommends that our stockholders vote “FOR” the adoption of the merger agreement.

Opinion of Ariba’s Financial Advisor

Our board of directors retained Morgan Stanley to provide it with financial advisory services and render a financial opinion in connection with a possible merger, sale or other strategic business combination. Our board of directors selected Morgan Stanley to act as our financial advisor based on Morgan Stanley’s qualifications, expertise and reputation, its knowledge of and involvement in recent transactions in our industry, and its knowledge of our business and affairs. At the meeting of our board of directors on May 21, 2012, Morgan Stanley rendered its oral opinion, subsequently confirmed in writing, that as of May 21, 2012, and based upon and subject to the various assumptions, procedures, factors, qualifications and limitations set forth in the written opinion, the $45.00 per share in cash to be received by the holders of shares of Ariba common stock (other than the holders of shares (i) held in treasury, (ii) held by any subsidiary directly or indirectly wholly-owned by us, (iii) held by SAP, merger sub, or any of their respective direct or indirect wholly-owned subsidiaries, or (iv) as to which appraisal rights have been perfected, all of which we refer to as “excluded shares”) pursuant to the merger agreement was fair from a financial point of view to such holders.

The full text of the written opinion of Morgan Stanley, dated as of May 21, 2012, is attached as Annex B to this proxy statement. The opinion sets forth, among other things, the assumptions made, procedures followed, matters considered and limitations on the scope of the review undertaken by Morgan Stanley in rendering its opinion. We encourage you to read the opinion carefully and in its entirety. Morgan Stanley’s opinion is directed to our board of directors and addresses only the fairness from a financial point of view of the consideration to be received by the holders of shares of Ariba common stock (other than the holders of the excluded shares) pursuant to the merger agreement as of the date of the opinion. It does not constitute a recommendation to any holder of Ariba common stock as to how to vote at any stockholders’ meeting held in connection with the merger or whether to take any other action with respect to the merger. The summary of the opinion of Morgan Stanley set forth below is qualified in its entirety by reference to the full text of the opinion.

In connection with rendering its opinion, Morgan Stanley, among other things:

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In arriving at its opinion, Morgan Stanley assumed and relied upon, without independent verification, the accuracy and completeness of the information that was publicly available or supplied or otherwise made available to Morgan Stanley by us and formed a substantial basis for its opinion. With respect to the financial projections, Morgan Stanley assumed that they had been reasonably prepared on bases reflecting the best currently available estimates and judgments of our management of the future financial performance of Ariba. In addition, Morgan Stanley assumed that the merger will be consummated in accordance with the terms set forth in the merger agreement without any material waiver, amendment or delay of any terms or conditions, and that the definitive merger agreement would not differ in any material respect from the final draft furnished to Morgan Stanley. Morgan Stanley assumed that in connection with the receipt of all the necessary governmental, regulatory or other approvals and consents required for the proposed merger, no delays, limitations, conditions or restrictions will be imposed that would have a material adverse effect on the contemplated benefits expected to be derived in the proposed merger. Morgan Stanley is not a legal, tax or regulatory advisor. Morgan Stanley is a financial advisor only and relied upon, without independent verification, the assessment of Ariba and our legal counsel, tax or regulatory advisors with respect to legal, tax or regulatory matters. Morgan Stanley expressed no opinion with respect to the fairness of the amount or nature of the compensation to any of our officers, directors or employees, or any class of such persons, relative to the consideration to be received by the holders of shares of Ariba common stock in the transaction (other than the holders of the excluded shares). Morgan Stanley did not make any independent valuation or appraisal of our assets or liabilities, nor was Morgan Stanley furnished with any such appraisals. Morgan Stanley’s opinion was necessarily based on financial, economic, market and other conditions as in effect on, and the information made available to Morgan Stanley as of, May 21, 2012. Events occurring after May 21, 2012 may affect Morgan Stanley’s opinion and the assumptions used in preparing it, and Morgan Stanley did not assume any obligation to update, revise or reaffirm its opinion.

Summary of Financial Analyses

The following is a summary of the material analyses performed by Morgan Stanley in connection with its oral opinion and the preparation of its written opinion letter dated May 21, 2012. The following summary is not a complete description of Morgan Stanley’s opinion or the financial analyses performed and factors considered by Morgan Stanley in connection with its opinion, nor does the order of analyses described represent the relative importance or weight given to those analyses. The various analyses summarized below were based on the closing price of $36.10 per share of Ariba common stock as of May 18, 2012, the last full trading day prior to the meeting of our board of directors on May 21, 2012 to consider and approve, adopt and authorize the merger agreement. Some of these summaries of financial analyses include information presented in tabular format. In order to fully understand the financial analyses used by Morgan Stanley, the tables must be read together with the text of each summary. The tables alone do not constitute a complete description of the financial analyses.

Trading Range Analysis

Morgan Stanley performed a trading range analysis with respect to the historical share prices of Ariba common stock. Morgan Stanley reviewed the range of closing prices of Ariba common stock for various periods ending on May 18, 2012. Morgan Stanley observed the following:

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Morgan Stanley observed that Ariba common stock closed at $36.10 on May 18, 2012. Morgan Stanley noted that the consideration per share of Ariba common stock of $45.00 pursuant to the merger agreement reflected a 22.6% premium to the average closing price per share of Ariba common stock for the 30 days prior to and including May 18, 2012, and a 38.4% premium to the average closing price per share of Ariba common stock for the 90 days prior to and including May 18, 2012.

Equity Research Analysts’ Price Targets

Morgan Stanley reviewed and analyzed future public market trading price targets for Ariba common stock prepared and published by equity research analysts prior to May 18, 2012. These one year forward targets reflected each analyst’s estimate of the future public market trading price of Ariba common stock and are not discounted to reflect present values. The range of undiscounted analyst price targets for Ariba common stock was $34.00 to $50.00 per share as of May 18, 2012, and Morgan Stanley noted that the median undiscounted analyst price target was $40.00 per share, while the 25^th and 75^th percentile undiscounted analyst price targets were $39.25 and $41.50, respectively. The range of analyst price targets per share for Ariba common stock discounted at 10.9% to reflect our cost of equity was $30.67 to $45.10 per share as of May 18, 2012, and Morgan Stanley noted that the median discounted analyst price target was $36.08 per share, while the 25^th and 75^th percentile discounted analyst price targets were $35.40 and $37.43, respectively.

Morgan Stanley noted that the consideration to be received by holders of shares of Ariba common stock pursuant to the merger agreement is $45.00 per share.

The public market trading price targets published by equity research analysts do not necessarily reflect current market trading prices for Ariba common stock and these estimates are subject to uncertainties, including the future financial performance of Ariba and future financial market conditions.

Public Trading Comparables Analysis

Morgan Stanley performed a public trading comparables analysis, which attempts to provide an implied value of a company by comparing it to similar companies that are publicly traded. Morgan Stanley compared certain of our financial information with equivalent publicly available consensus estimates for companies that share similar business characteristics such as those that provide software as a service or those that have certain comparable operating characteristics including, among other things, similarly sized revenue and/or revenue growth rates, market capitalizations, profitability, scale and/or other similar operating characteristics (we refer to these companies as the “comparable companies”). These companies included the following:

Selected Software as a Service Companies

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Selected High-Growth Software Companies

For purposes of this analysis, Morgan Stanley analyzed the following statistics of each of these companies for comparison purposes:

Based on its review and understanding of the relevant metrics for each of the comparable companies, its further analysis of the relevant metrics for each of the comparable companies and upon the application of its professional judgment, Morgan Stanley selected representative ranges of financial multiples and applied these ranges of multiples to the relevant company financial statistic. For purposes of estimated calendar years 2012 and 2013 revenue and free cash flow per share, Morgan Stanley utilized publicly available equity research analyst estimates, available as of May 18, 2012, which we refer to as the “street case.” Morgan Stanley also utilized two sets of estimates prepared by our management, which we refer to as the management base case and the management high growth case, respectively, as more fully described under the heading “—Financial Projections” beginning on page 44 of this proxy statement.

Based on the outstanding shares of Ariba common stock on a fully diluted basis (including outstanding options and restricted stock units), Morgan Stanley calculated the estimated implied value per share of Ariba common stock as follows:

Morgan Stanley noted that the consideration to be received by holders of shares of Ariba common stock pursuant to the merger agreement is $45.00 per share.

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No company utilized in the public trading comparables analysis is identical to Ariba. In evaluating comparable companies, Morgan Stanley made judgments and assumptions with regard to industry performance, general business, economic, market and financial conditions and other matters, many of which are beyond our and Morgan Stanley’s control, such as the impact of competition on our businesses and the industry generally, industry growth and the absence of any adverse material change in our financial condition and prospects or the industry, or in the financial markets in general. Mathematical analysis (such as determining the average or median) is not in itself a meaningful method of using peer group data.

Discounted Equity Value Analysis

Morgan Stanley performed a discounted equity value analysis, which is designed to provide insight into the estimated future value of a company’s common equity as a function of our estimated future free cash flow per share and a potential range of price per share to free cash flow per share multiples. The resulting value is subsequently discounted to arrive at a present value for such company’s stock price. In connection with this analysis, Morgan Stanley calculated a range of present equity values per share of Ariba common stock on a standalone basis. To calculate the discounted equity value, Morgan Stanley used calendar year 2014 free cash flow per share estimates based on the street case, the management base case and the management high growth case. Morgan Stanley applied a range of free cash flow multiples to these estimates and applied a discount rate of 10.9%, to reflect Ariba’s cost of equity.

The following table summarizes Morgan Stanley’s analysis:

Morgan Stanley noted that the consideration to be received by holders of shares of Ariba common stock pursuant to the merger agreement is $45.00 per share.

Discounted Cash Flow Analysis

Morgan Stanley calculated a range of equity values per share for Ariba based on a discounted cash flow analysis to value Ariba as a standalone entity. Morgan Stanley utilized projections from each of the street case, the management base case and the management high growth case. For the analysis utilizing the street case, projections were based on publicly available estimates available as of May 18, 2012 through 2013 prepared by equity research analysts, and estimates for 2014 through 2021 were developed by an extrapolation of 2013 estimates to reach steady state margin and growth profile by 2021. For purposes of its discounted cash flow analysis, Morgan Stanley defined unlevered free cash flow as earnings before interest, taxes, depreciation and amortization, less (i) stock based compensation expense, (ii) taxes and (iii) capital expenditures, plus change in working capital which included positive changes in deferred revenue. Stock-based compensation expense was treated as an expense in connection with this analysis. With respect to the analysis utilizing management-provided estimates, projections through 2014 were based on management projections, and projections for 2015 through 2021 were developed by an extrapolation of 2014 estimates based on 2014 growth and margin performance in each of the management base case and the management high growth case and to reach a steady state margin and growth profile by 2021. Morgan Stanley calculated the net present value of free cash flows for Ariba for the years 2012 through 2021 and calculated terminal values in the year 2021 based on a terminal perpetual growth rate ranging from 2.0% to 4.0%. Morgan Stanley selected these terminal perpetual growth rates based on the application of its professional judgment. These values were discounted to present values as of June 30, 2012 at a discount rate of 10.9%, which discount rate was selected to reflect our weighted average cost of capital.

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The following table summarizes Morgan Stanley’s analysis:

Morgan Stanley noted that the consideration to be received by holders of shares of Ariba common stock pursuant to the merger agreement is $45.00 per share.

Analysis of Precedent Transactions

Morgan Stanley performed a precedent transactions analysis, which is designed to imply a value of a company based on publicly available financial terms and premia of selected transactions that share some characteristics with this transaction. In connection with its analysis, Morgan Stanley compared publicly available statistics for select software sector transactions with a value of greater than $500 million occurring between January 1, 2008 and May 1, 2012. The following is a list of the transactions reviewed:

Selected Software Sector Transactions (Target / Acquiror)

Selected Software as a Service Transactions

Art Technology Group, Inc. / Oracle Corporation

Omniture, Inc. / Adobe Systems Inc.

RightNow Technologies, Inc. / Oracle Corporation

SuccessFactors, Inc. / SAP AG

Taleo Corporation / Oracle Corporation

Selected Non-Software as a Service Transactions

ArcSight, Inc. / Hewlett-Packard Company

Autonomy Corporation / Hewlett-Packard Company

Blackboard Inc. / Providence Equity Partners LLC

Eclipsys Corporation / Allscripts-Misys Healthcare Solutions, Inc.

Epicor Software Corporation / Apax Partners Worldwide LLP

Fast Search & Transfer, Inc. / Microsoft Corporation

Interactive Data Corporation / Investor Group

Interwoven Inc. / Autonomy Corporation

Lawson Software Inc. / Infor Global Solutions, Inc. (Golden Gate Capital)

McAfee, Inc. / Intel Corporation

Novell, Inc. / Attachmate Corporation

Phase Forward Inc. / Oracle Corporation

Quest Software, Inc. / Insight Venture Management, LLC

Radiant Systems Inc. / NCR Corporation

S1 Corporation / ACI Worldwide, Inc.

SkillSoft Incorporated / Investor Group

Sonic Corporation / Rovi Corporation

SonicWALL, Inc. / Investor Group

SonicWALL, Inc. / Dell Inc.

Sybase, Inc. / SAP AG

SPSS Inc. / International Business Machines Corporation

Sun Microsystems Computer Corporation / Oracle Corporation

Wind River Systems, Inc. / Intel Corporation

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For each transaction listed above, Morgan Stanley noted the following financial statistics where available: (1) implied premium to the acquired company’s closing share price on the last trading day prior to announcement; (2) implied premium to the acquired company’s 30 trading day average closing share price prior to announcement; (3) implied premium to the acquired company’s 60 trading day average closing share price prior to announcement; (4) implied premium to the acquired company’s highest closing share price over the twelve month period prior to announcement; (5) the multiple of aggregate value of the transaction to next twelve months estimated revenue; and (6) the multiple of offer price of the transaction to next twelve months estimated earnings per share.

Based on its review and understanding of the relevant metrics for each of the transactions, its further analysis of the relevant metrics for each of the transactions and upon the application of its professional judgment, Morgan Stanley selected representative ranges of implied premia and financial multiples of the transactions and applied these ranges of premia and financial multiples to the relevant company financial statistic. For purposes of estimated next twelve months revenue, Morgan Stanley utilized estimates included in each of the street case, the management base case and the management high growth case. The following table summarizes Morgan Stanley’s analysis:

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For each financial statistic used in the exhibit displayed above, Morgan Stanley also noted the price per share of Ariba implied by the median and top quartile multiples of the software as a service precedent transactions. The following table summarizes Morgan Stanley’s analysis:

Morgan Stanley noted that the consideration to be received by holders of shares of Ariba common stock pursuant to the merger agreement is $45.00 per share.

No company or transaction utilized in the precedent transactions analysis is identical to us or the merger. In evaluating the precedent transactions, Morgan Stanley made judgments and assumptions with regard to industry performance, general business, market and financial conditions and other matters, which are beyond our control, such as the impact of competition on our business or the industry generally, industry growth and the absence of any adverse material change in our financial condition or the industry or in the financial markets in general, which could affect the public trading value of the companies and the aggregate value and equity value of the transactions to which they are being compared.

General

In connection with the review of the merger by our board of directors, Morgan Stanley performed a variety of financial and comparative analyses for purposes of rendering its opinion. The preparation of a financial opinion is a complex process and is not necessarily susceptible to a partial analysis or summary description. In arriving at its opinion, Morgan Stanley considered the results of all of its analyses as a whole and did not attribute any particular weight to any analysis or factor it considered. Morgan Stanley believes that selecting any portion of its analyses, without considering all analyses as a whole, would create an incomplete view of the process underlying its analyses and opinion. In addition, Morgan Stanley may have given various analyses and factors more or less weight than other analyses and factors, and may have deemed various assumptions more or less probable than other assumptions. As a result, the ranges of valuations resulting from any particular analysis described above should not be taken to be Morgan Stanley’s view of the actual value of us. In performing its analyses, Morgan Stanley made numerous assumptions with respect to industry performance, general business and economic conditions and other matters. Many of these assumptions are beyond our control. Any estimates contained in Morgan Stanley’s analyses are not necessarily indicative of future results or actual values, which may be significantly more or less favorable than those suggested by such estimates.

Morgan Stanley conducted the analyses described above solely as part of its analysis of the fairness from a financial point of view of the consideration to be received by the holders of shares of Ariba common stock (other

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than the holders of the excluded shares) pursuant to the merger agreement and in connection with the delivery of its opinion, dated May 21, 2012, to our board of directors. These analyses do not purport to be appraisals or to reflect the prices at which shares of Ariba common stock might actually trade.

The consideration to be received by the holders of shares of Ariba common stock pursuant to the merger agreement was determined through arm’s length negotiations between Ariba, on the one hand, and SAP and SAP AG, on the other hand, and was approved by our board of directors. Morgan Stanley provided advice to our board of directors during these negotiations. Morgan Stanley did not, however, recommend any specific consideration to Ariba or our board of directors or that any specific consideration constituted the only appropriate consideration for the merger.

Morgan Stanley’s opinion and its presentation to our board of directors was one of many factors taken into consideration by our board of directors in deciding to approve, adopt and authorize the merger agreement. Consequently, the analyses as described above should not be viewed as determinative of the opinion of our board of directors with respect to the consideration pursuant to the merger agreement or of whether our board of directors would have been willing to agree to different consideration.

Our board of directors retained Morgan Stanley based upon Morgan Stanley’s qualifications, experience and expertise. Morgan Stanley is an internationally recognized investment banking and advisory firm. Morgan Stanley, as part of its investment banking and financial advisory business, is continuously engaged in the valuation of businesses and securities in connection with mergers and acquisitions, negotiated underwritings, competitive biddings, secondary distributions of listed and unlisted securities, private placements and valuations for corporate, estate and other purposes. In the ordinary course of Morgan Stanley’s trading, brokerage, investment management and financing activities, Morgan Stanley, its affiliates, directors and officers may at any time invest on a principal basis or manage funds that invest, hold long or short positions, finance positions, and may trade or otherwise structure and effect transactions, for their own account or for the accounts of customers, in the debt or equity securities or loans of Ariba, SAP, SAP AG or any other company, or any currency or commodity, that may be involved in the transactions contemplated by the merger agreement, or any related derivative instrument.

Under the terms of its engagement letter, Morgan Stanley provided us financial advisory services and a financial opinion in connection with the merger, and we have agreed to pay Morgan Stanley a fee of approximately $36.0 million for its services, all of which is contingent upon the closing of the merger. We have also agreed to reimburse Morgan Stanley for its expenses, including reasonable fees of outside counsel and other professional advisors, incurred in connection with its engagement. In addition, we have agreed to indemnify Morgan Stanley and its affiliates, their respective directors, officers, agents and employees and each person, if any, controlling Morgan Stanley or any of its affiliates against certain liabilities and expenses, including certain liabilities under the federal securities laws, relating to or arising out of Morgan Stanley’s engagement. In the two years prior to the date of its opinion, Morgan Stanley (i) has provided financial advisory services to us and has advised us that it has received approximately $1.5 million in fees from us in connection with such services, and (ii) has provided financing services for SAP and SAP AG and has advised us that it has received fees of less than $1.0 million in connection with such services. Morgan Stanley may also seek to provide such services to SAP, SAP AG and us in the future and expects to receive fees for the rendering of these services. Morgan Stanley’s opinion was approved by a committee of Morgan Stanley investment banking and other professionals in accordance with Morgan Stanley’s customary practice.

Financial Projections

We do not as a matter of course make public projections as to future performance, earnings or other results beyond the current fiscal year and are especially cautious of making financial forecasts for extended periods because of the unpredictability of the underlying assumptions and estimates. However, we have provided certain non-public, unaudited, stand-alone, financial forecasts regarding our anticipated future operations that were prepared by our management, which we refer to as “Projections,” to our board of directors for review and to

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Morgan Stanley for use in connection with the rendering of its fairness opinion to our board of directors and performing its related financial analysis, as described under the heading “— Opinion of Ariba’s Financial Advisor” beginning on page 36 of this proxy statement. The Projections consist of a management base case and management high growth case, as described below.

The Projections were prepared by our management for internal use. The Projections were not prepared with a view toward public disclosure and do not necessarily comply with published guidelines of the SEC, the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of financial forecasts or generally accepted accounting principles, which we refer to as “GAAP.” Our independent registered public accounting firm has not audited, reviewed, compiled or performed any procedures with respect to the Projections and does not express an opinion or any form of assurance related thereto. The summary of the Projections is not being included in this proxy statement to influence any Ariba stockholder’s decision whether to vote for the merger, but is being included because the Projections were made available to our board of directors for review and were used by Morgan Stanley in connection with the rendering of its fairness opinion to our board of directors and performing its related financial analysis, as described under the heading “— Opinion of Ariba’s Financial Advisor” beginning on page 36 of this proxy statement. SAP AG received a set of projections based on the management high growth case for calendar years 2012 through 2014.

The Projections while presented with numerical specificity necessarily were based on numerous estimates, variables and assumptions that are inherently uncertain and many of which are beyond our control. Because the Projections cover multiple years, by their nature, they become subject to greater uncertainty with each successive year. The assumptions upon which the Projections were based necessarily involve judgments with respect to, among other things, future economic, competitive and regulatory conditions and financial market conditions, all of which are difficult or impossible to predict accurately and many of which are beyond our control. The Projections also reflect assumptions as to certain business decisions that are subject to change. Furthermore, the Projections do not take into account any circumstances or events occurring after the date they were prepared, including the announcement of the potential acquisition of our company by SAP pursuant to the merger or our compliance with our covenants under the merger agreement. Important factors that may affect actual results and result in the Projections not being achieved include, but are not limited to, the risk factors described in our annual report on Form 10-K for the fiscal year ended September 30, 2011, subsequent quarterly reports on Form 10-Q and current reports on Form 8-K. In addition, the Projections may be affected by our ability to achieve strategic goals, objectives and targets over the applicable period.

The Projections are forward-looking statements. For information on factors that may cause our future financial results to materially vary, see the section entitled “Forward-Looking Information” beginning on page 1 of this proxy statement.

Accordingly, there can be no assurance that the Projections will be realized, and actual results may vary materially from those shown. The inclusion of the Projections in this proxy statement should not be regarded as an indication that we or any of our affiliates, advisors or representatives considered or consider the Projections to be predictive of actual future events, and the Projections should not be relied upon as such. Neither we nor any of our affiliates, advisors, officers, directors or representatives can give any assurance that actual results will not differ from the Projections, and none of them undertakes any obligation to update or otherwise revise or reconcile the Projections to reflect circumstances existing after the date the Projections were generated or to reflect the occurrence of future events even in the event that any or all of the assumptions underlying the Projections are shown to be in error. We do not intend to make publicly available any update or other revision to the Projections, except as otherwise required by law. Neither we nor any of its affiliates, advisors, officers, directors or representatives has made or makes any representation to any Ariba stockholder or other person regarding our ultimate performance compared to the information contained in the Projections or that the Projections will be achieved. We have made no representation to SAP or SAP AG in the merger agreement or otherwise concerning the Projections.

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The adjusted gross profit and adjusted operating income contained in the Projections exclude expenses for or benefits from (i) amortization of intangible assets related to acquisitions, (ii) stock-based compensation, (iii) restructuring costs or benefits primarily related to lease abandonment and (iv) discontinued operations. Free cash flow refers to cash flow from operations less capital expenditures. Adjusted gross profit, adjusted operating income and free cash flow are non-GAAP measures that are used by our management as supplemental financial measurements to evaluate our operational trends and should not be considered as alternatives to gross profit, operating income or cash flow as indicators of our operating performance. Adjusted gross profit, adjusted operating income and free cash flow are not defined under GAAP. Accordingly, they have limitations in that they do not reflect all of the amounts associated with our results of operations, as determined in accordance with GAAP, and may not be comparable measurements to those used by other companies.

In light of the foregoing factors and the uncertainties inherent in the Projections, Ariba stockholders are cautioned not to place any reliance on the Projections in determining whether to adopt the merger agreement, approve the compensation proposal or approve the adjournment proposal, or for any other purpose.

The following is a summary of the Projections:

Projected Financial Information

(dollars in millions, except per share information)

Because our fiscal year starts on October 1, the Projections have been converted to a calendar year basis in order to be comparable to other public companies and precedent transactions that our financial advisor might examine as part of its analysis. The management base case presents target projections based upon the assumption that our network revenue and subscription software applications revenue would continue to grow at a modestly lower rate than our organic growth rate in recent periods. Additionally, it assumed a continued decline in the legacy maintenance revenue stream. The management high growth case assumed significant acceleration of growth in both the network and subscription software applications businesses driven by significantly increased adoption of the network by buyers and suppliers, and assumed limited execution risk. The management high growth case also assumed a continued decline in the legacy maintenance revenue stream, though did not put meaningful weight into the potential negative impact of the changing market landscape and assumed no increase in competitive pressure.

Interests of Ariba’s Directors and Named Executive Officers in the Merger

When considering the recommendation of our board of directors, you should be aware that members of our board of directors and our named executive officers have interests in the merger in addition to their interests as Ariba stockholders generally. These interests are described below and may be different from, or in conflict with, your interests as an Ariba stockholder. The members of our board of directors were aware of the material facts as to these additional interests, and considered them, when they approved the merger agreement.

Overview

Set forth below are descriptions of the interests of our directors and named executive officers, including interests in equity-based awards, payments of severance, and other compensation and benefit arrangements. The dates used in the discussions below to quantify certain of these interests have been selected for illustrative purposes only, and do not necessarily reflect the dates on which certain events will occur.

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Interests of Non-Employee Directors

Treatment in the Merger of the Equity Awards Held by Non-Employee Directors

The general treatment of stock options and restricted stock units (which we refer to as “RSUs”) in the merger, including such awards held by our non-employee directors, is described below under “—Treatment of Outstanding Stock Options, Restricted Stock Units, Performance-Based Restricted Stock Units and Restricted Stock” beginning on page 62 of this proxy statement.

Under the terms of their existing equity awards, all unvested RSUs held by our non-employee directors will become fully vested upon closing of the merger. As of May 15, 2012, all stock options held by our non-employee directors had already vested and no non-employee director held shares of unvested restricted stock. The merger agreement provides that all of the stock options held by each of our non-employee directors will be cashed out in an amount equal to the positive difference between $45.00 and the exercise price per share of the stock option (with such resulting amount multiplied by the number of shares subject to each such stock option) and that RSUs held by each of our non-employee directors will be cancelled in exchange for $45.00 multiplied by the number of RSUs held by such individual.

The following table summarizes, as of May 15, 2012, the outstanding vested stock options held by each of our non-employee directors, the weighted average exercise price of their stock options, the number of vested RSUs, the number of unvested RSUs, and the consideration that each of them will become entitled to upon closing of the merger pursuant to the terms of their outstanding equity awards.

Transaction Committee Fees

Our board of directors has approved payment to each non-employee member of our board of directors who has served on the transaction committee (Messrs. Johnson, Knowling and Wallman) of $25,000 for service on the committee. Payment of this fee will be made without regard to when, or whether, the merger closes. Our board of directors approved the payment on May 21, 2012, based on the recommendation of our compensation committee, which we refer to as the “compensation committee,” in connection with the approval of the merger agreement and related matters.

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Interests of our Named Executive Officers

Our current named executive officers are Mr. Calderoni (our Chief Executive Officer), Mr. Costello (our President), Mr. Parker (our Chief Operating Officer) and Mr. Rubaie (our Chief Financial Officer), whose fiscal year 2011 compensation was described in our 2012 annual stockholders’ meeting proxy statement filed with the SEC on December 8, 2011, which we refer to as our “FY12 Proxy Statement.” These named executive officers are our only “executive officers” as such term is defined under the Exchange Act.

Existing Employment and Severance Arrangements with Ariba

Robert M. Calderoni

Ariba and Mr. Calderoni are parties to a severance agreement, which we refer to as the “Calderoni severance agreement,” entered into in 2008. Under this agreement, if within 12 months after a change in control of Ariba, Mr. Calderoni’s employment is terminated for a reason other than cause or disability, or if he resigns after Ariba’s successor or its parent has:

then in each case he would become entitled to:

The Calderoni severance agreement provides that if any payments or benefits to which Mr. Calderoni becomes entitled in connection with a change in control of Ariba, whether arising under that agreement or otherwise, constitute a parachute payment under Section 280G of the Internal Revenue Code of 1986, as amended, which we refer to as the “Code,” he will become entitled to receive a full tax gross-up to cover the cost to him of the excise tax imposed on such parachute payment under Section 4999 of the Code. If applicable, this gross-up payment would also reimburse him for any additional taxes imposed on the gross-up payment itself. However, this tax gross-up will not be paid, and a reduction in his benefits would be made, if Mr. Calderoni’s severance benefits or other parachute payments could be reduced by an amount up to $25,000 so as to avoid the imposition of the excise tax on Mr. Calderoni.

The Calderoni severance agreement also provides Mr. Calderoni with certain severance benefits if he experiences a termination of employment by Ariba for a reason other than cause or disability more than 12 months after a change in control. If he experiences a termination of employment by Ariba for a reason other than cause or disability more than 12 months after the merger, he would become entitled to:

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These benefits are contingent on Mr. Calderoni’s executing a general release of claims and complying for 18 months with certain restrictive covenants which include non-solicitation of employees, non-competition and non-disparagement covenants.

In October 2011, Ariba entered into two additional agreements with Mr. Calderoni. The first of these agreements (which we refer to as the “Calderoni employment agreement”) contemplates that he will transition from the position of Chief Executive Officer to Executive Chair of the board of directors in mid-fiscal year 2014 and remain as Executive Chair through the end of fiscal year 2016. During fiscal years 2013-2016, Mr. Calderoni’s annual base salary is set at $675,000, his annual target incentive cash bonus is set at 100% of base salary (with the possibility of 200% of base salary upon overachievement), and his annual long-term incentive equity compensation during this term will have an at-target value at grant of $4.5 million for fiscal year 2013, $4.0 million for fiscal year 2014, and $2.0 million for each of fiscal years 2015 and 2016 (in each case with possible overachievement resulting in his earning a maximum of 200% of the number of at-target shares). The second agreement is a retention benefit agreement, which we refer to as the “Calderoni retention agreement,” under which we agreed to pay Mr. Calderoni $5.1 million at the end of the five-year service period contemplated by the Calderoni employment agreement. It also contains three-year non-solicitation of employees, non-competition and non-disparagement covenants and requires that Mr. Calderoni execute a release of claims in connection with receipt of his benefits thereunder.

Prior to its amendment in January 2012, the Calderoni retention agreement also provided that Mr. Calderoni would become entitled to the $5.1 million payment if Ariba were to be subject to a change in control prior to the end of the five-year term, provided he was still in service on the effective date of the transaction. In January 2012, the Calderoni retention agreement was amended to eliminate the “single-trigger” feature providing for payment upon a change in control. As amended, the agreement provides that Mr. Calderoni would become entitled to payment of the $5.1 million retention amount prior to the end of his five-year transition period only if he were to die, become permanently disabled, experience a “termination without cause” (as discussed below) at any time, or resign for “good reason” (as discussed below) on or within 12 months after a change in control of Ariba. We disclosed this amendment in a Form 8-K filed with the SEC on January 9, 2012.

For purposes of the Calderoni retention agreement, a “termination without cause” of Mr. Calderoni’s employment is defined as:

“Cause” for termination of employment under the Calderoni severance agreement in the context of a change in control generally requires that Mr. Calderoni have engaged in intentional misconduct that materially injures, or has a material adverse effect on the business or affairs of, Ariba and its subsidiaries, taken as a whole. Outside the context of a change in control, it generally requires gross negligence, intentional misconduct, misuse of company proprietary information, breach of company policy causing material injury to Ariba or having a material adverse effect on the business or affairs of Ariba and its subsidiaries, taken as a whole, or conviction of a felony. “Good reason” for termination of employment under this agreement as recently amended includes the failure of Ariba’s successor or its parent to appoint Mr. Calderoni as its chief executive officer (or executive chair if a change in control occurs after Mr. Calderoni has transitioned to that role at Ariba ), a reduction in his level of compensation, or a relocation of his place of business by more than 35 miles that increases his one-way commute time. In addition, “good reason” will occur if Ariba’s successor or its parent appoints Mr. Calderoni as its chief executive officer or executive chair (as applicable), but the appointing entity is not a company whose stock is traded on a major U.S. stock exchange.

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The merger constitutes a change in control under the terms of the Calderoni severance agreement and the Calderoni retention agreement. Assuming closing of the merger occurs on August 31, 2012 and that his service also terminates on that date under one or more of the circumstances described above, Mr. Calderoni would become entitled to the benefit amounts under his agreements as set forth in the “Golden Parachute Compensation” table in the section below entitled “—Potential Payments in Connection with a Change in Control” beginning on page 55 of this proxy statement.

Ahmed Rubaie, Kevin S. Costello, and Kent L. Parker

In 2008 we entered into agreements providing certain severance benefits with each of Messrs. Rubaie, Costello, and Parker. Under these agreements if, within 12 months after a change in control of Ariba, the employment of one of these named executive officers is terminated for a reason other than cause or disability, or if the officer resigns for good reason (as described below), then the agreements provide for:

In addition, these agreements provide that should any of the above payments and benefits constitute a parachute payment under Section 280G of the Code, then the named executive officer would become entitled to receive a full tax gross-up with respect to the excise tax imposed by Section 4999 of the Code. If applicable, this gross-up payment would also reimburse the officer for any additional taxes imposed on the gross-up payment itself. However, if the excise tax could be avoided by reducing the severance benefits and other parachute payments by an amount not in excess of 30% of such officer’s “base amount” (within the meaning of Section 280G of the Code), then the excise tax gross-up will not be paid and the benefits and payments would be reduced to the extent necessary to avoid imposition of the excise tax and no tax gross-up payment would be made.

In addition, if the employment of any of these named executive officers is terminated more than 12 months after a change in control of Ariba for a reason other than cause or disability, then the agreements provide for: