Is Salesforce.com set to face a new CRM challenger as SAP puts in place a head of Cloud strategy with the bravado to face down Marc Benioff and Larry Ellison?
If anyone had any lingering doubts that SAP is serious about the Cloud, the events of this weekend must surely have finally shaken them out of their complacency.
The German software giant is buying SuccessFactors for the tidy sum of $3.4 billon, a 52% mark up on its closing share price on Friday. Coming only 6 weeks after arch-enemy Oracle’s bid for RightNow it’s clear that the Cloud Computing landscape is undergoing a seismic shift as the applications old guard buy their way back into the game.
The deal will give SAP a major play in the Cloud Human Capital Management (HCM) market through which pureplay Workday has been cutting a swathe, typically at the expense of Oracle which has responded with its own Fusion HCM next generation apps.
But it’s clear that CRM expansion is also on the card. “We have CRM on premise that is a market leader and we have introduced Sales On Demand which is a beautiful solution that does a lot things that Salesforce.com finds difficult,” stated Sanjay Poonen, president, Global Solutions, SAP. Customers want to have a single view. You shouldn’t have to go to a third party to integration. We have picked out a handful of solutions that we have begun to build.”
The deal is also a major move for SuccessFactors CEO Lars Dalgaard, who founded the firm in 2001 and took it public in 2007. The flamboyant Dane is now going to be in charge of SAP’s entire Cloud strategy. With SAP’s backing and funding, the potential is there for Dalgaard to command a global agenda.
Whether the fiery CEO can bend to the SAP corporate style is another matter. Dalgaard is notoriously individualistic and has shown scant regard for the enterprise establishment in the past, but the potential for great things is clearly there. As a figurehead for SAP’s Cloud ambitions, he can certainly play in the same league as the Benioffs and the Ellisons.
Relations between Salesforce.com and SuccessFactors have been volatile over the years. The two fell out over staff poaching from one to the other, resulting in the termination of SuccessFactors use of Salesforce.com. But more recently the two have reconciled to the extent that Salesforce.com again counts SuccessFactors as a user.
The deal also gives SAP access to SuccessFactors Jam social collaboration and learning software. There had been rumours circulating that SAP was about to make an acquisition in the social networking space which had led to speculation that a takeover of Jive was on the cards.
The deal inevitably sets tongues wagging again about which Cloud pureplay might be next to receive an offer it can’t refuse. SuccessFactors President Doug Dennerline agreed: “They are going to have to work out what they want to do. This is a game changer.”
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