SAP Acquires SuccessFactors for $3.4 billion

SAP’s subsidiary SAP America has made a strong move into the cloud with the announcement of the planned purchase SuccessFactors, a provider of cloud-based human capital management (HCM) solutions. The acquisition will add SuccessFactors’ team and technology to SAP’s cloud assets, and most observers have noted that the move will surely accelerate SAP’s momentum as a provider of cloud applications, platforms and infrastructure.

In making the announcement, SAP described SuccessFactors’ solutions as “highly complementary” to SAP’s core HCM offerings and SAP’s other cloud assets, including SAP Business ByDesign for the suite cloud market and its line of business cloud offerings for large enterprises such as SAP Sales on Demand.

SuccessFactors claims 15 million subscription seats for its cloud services, and more than 3,500 customers in 168 countries.

Analysis of the deal in a video on the Washington Post by Mitchell Kertzman, managing director at Hummer Winblad Venture Partners, says the move was necessary to get SAP more established in the cloud. Meanwhile, a piece on Forbes.com forecasts 1 billion potential users for the merged companies:

Within its 176,000 customers around the globe, SAP has the far-flung potential to touch each of the 500 million people who work for those companies. But with the planned acquisition of SuccessFactors, that potential addressable market of users could double to 1 billion people due to the near-universal relevance among employees of SuccessFactors’ cloud-based applications, SAP co-CEO Bill McDermott said … McDermott said that SuccessFactors’ Human Capital Management solutions are applicable every employee in every company—“from the boardroom to the mailroom” and “from the CEO to the custodian”—offering the potential for the reach of SAP’s products to be extended far beyond its already-huge universe of business and technology users.