SAP Opts to Acquire Mobile Apps Vendor Syclo

By Tony Rizzo, Editor in Chief — April 11, 2012

When SAP originally acquired Sybase two questions immediately came up: 1) Why Sybase and not Syclo? 2) What will happen to Syclo now that its best partner has acquired its own mobile technology?
 
Since that acquisition, Sybase continues to be fully integrated into SAP, Syclo has continued to do well within its mobile niche, and in fact the SAP-Syclo relationship has remained intact. The agreement the two companies have reached marks the end of a very independent Syclo - which has looked to outside investment dollars, having been funded through its founders and its own revenue streams from day one, which dates back to the mid 1990s. The company has always run a tight financial ship and has grown organically throughout its history.
 
Now, following on the heels of SAP's other related announcement to partner closely with Adobe, Sencha and Appcelerator - a collection of mobile apps development platforms and frameworks, SAP has announced its intent to acquire Syclo - a pure play in a number of mobile vertical businesses.

The addition of Syclo's expertise in building and selling mobile solutions in industries such as utilities, oil and gas, life sciences and manufacturing will immediately enhance SAP mobile solutions. SAP also hopes that it will accelerate the adoption and deployment of new mobile asset management and field service solutions on Sybase Unwired Platform, part of the SAP mobile platform and the company's infrastructure for developing and managing mobile apps. Syclo EVP Jeff Kleban, who has been with the company since its founding, is fond of saying to this day that "mobility still hasn't fully caught on." He may finally need to change that viewpoint.
 
The Syclo acquisition is the latest step by SAP in its strategy to drive growth and innovation in core applications, analytics, enterprise mobility, cloud services, and database technology. The company has certainly been intensely focused on mobility since the Sybase acquisition, and it is clear that SAP is doing a good job of pushing mobile solutions out through its different groups (e.g. retail, business intelligence).

But Is It a Fit?
 
Syclo provides SAP with both domain-savvy expertise and industry-targeted vertical solutions. Syclo now offers prepackaged and pre-integrated mobile applications and application sutes - it markets the apps, not the platform they are built on. Syclo has acquired more than 600 customers in 39 countries across all major asset and mobile-intensive industries. Though we don't know what the actual overlap is, a large number of these customers come from the existing Syclo-SAP relationship. Syclo also brings with it a robust partner ecosystem - including such companies as Capgemini, whom Syclo recently landed a new European customer with. These mobile-focused partners will help SAP gain additional customer access on an international scale.
 
Syclo's expertise and technology manifests itself as a mature set of applications that complement SAP in key mobile areas such as enterprise asset management (EAM), field services, inventory management and approvals/workflow, and represents a significant growth opportunity for SAP. Once the acquisition is completed, Syclo's apps will be integrated within the SAP mobile platform, and will of course also be integrated with SAP Afaria, the company's mobile device management and security platform. The combination of SAP and Syclo will create a unique solution provider by combining mobile enterprise applications expertise with SAP's business suite - which owns huge market share.
 
It will be very interesting to see how Syclo's Agentry Mobile Platform and its SMART Mobile Suite will be integrated into the SAP/Sybase Unwired Platform (SUP). We don't see an easy integration here, and it will likely take some time before the two platforms emerge as a single entity. Whether Agentry survives and replaces certain SUP components, or whether the Syclo apps are transformed into true SUP apps and Agentry disappears requires close observation by potential customers.
 
Once applicable regulatory approvals are received, and satisfaction of certain other conditions is met, SAP will acquire 100 percent of Syclo's equity. SAP says that Syclo's employees will join SAP. Financial terms of the deal were not disclosed, though future SAP earnings reports will shed light on what it ultimately will cost SAP - its safe to say it won't approach the Sybase price tag - which most, if not all analysts, thought was too rich. In any case, the integration with SAP will prove a fitting and valuable conclusion to an independent Syclo.

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