The acquisition comes just a couple of weeks before its greatest rival Oracle launches its cloud strategy and has been seen by analysts as a move designed to push the business more towards a hosted environment.
Carter Lusher, chief IT analyst at Ovum, said that the move by SAP was talent grab to get expertise on cloud computing and technical issues.
"This acquisition has many other motivations as well. These include marketplace factors like acquiring customers and revenue stream and moving into adjacent markets in addition to building block factors like sales team headcount, technology R&D talent, and filling a product gap," he added.
"This is a logical step for SAP as it needs to accelerate its move into the cloud. This acquisition is consistent with SAP's overall M&A strategy and complements the SuccessFactors acquisition in December - providing greater depth of products, executives, and tech talent for the cloud," he said.
The deal got the unanimous backing of the Ariba board and should close in the third quarter.
"The cloud has profoundly changed the way people interact. The impact will be even greater as enterprises connect and collaborate in new ways with their global networks of customers and partners," said SAP Co-CEOs Bill McDermott and Jim Hagemann Snabe.
"Cloud-based collaboration is redefining business network innovation, and we are catching this wave in the early stage of its evolution. The addition of Ariba will create the business network of the future, deliver immediate value to our customers and provide another solid engine for driving SAP's growth in the cloud," he added.