SAP continues to acquire companies to boost its cloud services business
SAP (SAP) has made a number of big acquisitions in the past. These include $6.8 billion acquisition of Business Objects (a Business Intelligence product) in October 2007, the acquisition of Sybase (a Database product) for $5.8 billion in May 2010, the acquisition of SuccessFactors (a Talent Management product) for $3.4 billion in December 2011, and the acquisition of Ariba (a supplier network) for $4.3 billion in October 2012. Out of these, SuccessFactors and Ariba have played an important role in SAP’s cloud services business growth. SAP also recently acquired Hybris and Fieldglass to further leverage the cloud market growth.
SAP acquired SuccessFactors and Fieldglass to enhance its HR cloud solution market
SAP is already the leading player in the HR cloud solution market and competes with Workday (WDAY). With the acquisition of SuccessFactors and Fieldglass, SAP has further increased its presence in this market. During the conference call to announce its earnings, SAP’s management mentioned, “With SuccessFactors, they will streamline and align talent and core HR processes, in order to increase focus on strategic objectives to support their company’s growth. With the successful closing of Fieldglass, a very important acquisition, we will also lead the fast-growing market for flexible workforce management. Today, more companies need to manage a diverse workforce, including contractors, part time and temporary workers. Fieldglass will significantly enhance our business network strategy and enable our customers to collaboratively manage all of their business needs, permanent employees, flexible workforce and goods and services, all in the SAP Cloud.”
The Hybris acquisition helped SAP to consolidate its position in the CRM market
SAP faces stiff competition in the CRM market from players such as Salesforce.com (CRM), Oracle (ORCL), Microsoft (MSFT), and IBM (IBM). According to Gartner, SAP’s 12.9% market share was second to Salesforce.com’s 14.0% market share. However, with Hybris acquisition, SAP is poised to gain more market share. SAP’s management mentioned, “Our hybris omni-channel e-commerce platform in combination with cloud for sales is seeing triple-digit growth, as companies unlock cross-sell and upsell opportunities in real-time in fact, like never before. Companies, as diverse as Max Mara Fashion and Boeing are turning to hybris to deliver state-of-the-art B2B Commerce and maximizing conversion and revenue rates.”
© 2013 Market Realist, Inc.
But if I knew how to manage my portfolio safer and smarter than most hedge fund managers, I could realistically grow my wealth.