SAP AG and SuccessFactors, Inc. announced today that SAP subsidiary, SAP America, Inc., has reached an agreement to merge with SuccessFactors, a provider of cloud-based human capital management (HCM) solutions. The deal will cost SAP $3.4B, and the transaction expected to close in the first quarter of 2012.
The acquisition will add SuccessFactors’ team and technology to SAP’s existing cloud assets. SAP - which has a well-deserved reputation as an old-fashioned back office, on-premise software vendor - hopes that the acquisition will accelerate SAP’s momentum - and perception - as a provider of mobile and cloud applications, platforms and infrastructure. The combination of SAP and SuccessFactors will establish an advanced end-to-end offering of cloud and on-premise solutions for managing all relevant business processes.
SuccessFactors’ solutions are, for the most part, complementary to SAP’s core HCM offerings as well as SAP’s cloud capabilities: SAP Business ByDesign for the suite cloud market and SAP’s line of business cloud offerings for large enterprises such as SAP Sales on Demand. The acquisition continues SAP’s strategy of delivering solutions on premise, in the cloud and on mobile devices - a series of strategic moves SAP continues to make to drive innovation in its core applications and analytics, introduce breakthroughs in memory technology, establish leadership in enterprise mobility, and grow its cloud portfolio.
"The cloud is a core of SAP’s future growth. The acquisition will help us address the top priority for CEOs globally – managing people and talent," said Bill McDermott , Co-CEO, SAP. "Together, SAP and SuccessFactors will create business value for customers, and deliver the needed synergies to accelerate our growth in the cloud."
With more than 3,500 customers in 168 countries, SuccessFactors operates one of the largest populations of paying cloud users, with 15 million subscription seats. SuccessFactors’ scalable cloud application platform supports organizations of all sizes from dozens to millions of users. With proven deployments in SAP environments already in hand, the combination of SuccessFactors and SAP holds significant growth potential when the 500 million employees of SAP customers and its 15,000 HCM deployments are factored into the mix.
The CEO of SuccessFactors, Lars Dalgaard , will lead the cloud business of SAP in addition to his responsibility as CEO of SuccessFactors. As with the approach SAP has taken with Sybase, SuccessFactors will remain independent and be named "SuccessFactors, an SAP company."
Key Deal Factors
The combination of SuccessFactors and SAP will create a comprehensive HCM solution, marrying strength in enterprise applications with people-focused cloud applications:
- SAP's ability to drive mobility through its Sybase team will significantly drive new mobile capabilities for SuccessFactors
- SuccessFactors’ complementary solutions will be an attractive option for more than 500 million employees of SAP customers
- SuccessFactors’ applications are designed for businesses of all sizes, and offer easily adopted solutions for customers of SAP Business Suite, SAP Business ByDesign, SAP Business All-in-One, and SAP Business One
- SuccessFactors’ cloud expertise and know how, rapid cloud innovation and proven success running large scale cloud deployments will help SAP customers more rapidly adopt cloud applications
- SuccessFactors’ mobile applications combined with the mobile expertise of SAP and Sybase will offer customers a powerful business-to-employee mobility portfolio
- SuccessFactors’ focus on enabling business insight and execution fits well with SAP’s business analytics platform, promising new levels of real time decision making across the enterprise