SAP Acquires SuccessFactors

Posted by admin on December 23, 2011 under ERP Software, HCM Software | Be the First to Comment

A couple of weeks ago, SAP announced the acquisition of SuccessFactors – a Talent Management/HR software solution. There has been a lot of commentary regarding the high price that SAP paid for this company on the heels of Oracle’s acquisition of RightNow. Clearly these large traditional ERP/database vendors (SAP and Oracle) are doing everything they can to move quickly to the SaaS/Cloud market and the fastest way to do that is to acquire an established company.

While the acquisition of SuccessFactors looks like a good play for investors, we look at things from a practical end user standpoint. The main question is, what will SAP do with this product? Our take is that in the short run, there will not be much change with regard to current SuccessFactors customers. However, in the medium run, we would imagine that a standard interface will be made to the SAP R/3 product offering a cloud talent management solution to SAP’s existing customer base. In the long run, SuccessFactors could become part of a suite of cloud products offered by SAP.

It is important to note that SAP has built a cloud ERP product called Business By Design (BBD). However, at this time, BBD is really geared to the lower end of the market and does not scale up to the level of companies that would have a separate Talent Management solution like SuccessFactors, so an interface between these products does not make sense at this time. At this time, SAP’s current cloud software portfolio includes a high end Talent Management solution and a low end ERP product. This means that SAP will likely make other Cloud software acquisitions over the coming months.

This will be the last post to the Software Evaluation Blog for 2011. We wish everyone a great holiday season and look forward to providing more software vendor insight in 2012!