Government // Enterprise Architecture
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5/4/2010
08:02 AM
Bob Evans
Bob Evans
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Global CIO: Wal-Mart Picks SuccessFactors For Largest Enterprise Deal Ever

A 300,000-seat trial turns into a 2.1M-seat global deal as SuccessFactors' business-execution strategy continues to resonate.

Riding its business-execution software strategy to unprecedented heights, SuccessFactors yesterday posted strong financial results and also signed the highest-scale enterprise IT deal ever--for 2.1 million seats--with a customer that is almost certainly Wal-Mart.

SuccessFactors said this huge customer had installed its products two years ago for 300,000 employees but has now agreed to increase that deployment seven-fold to all of its 2.1 million employees around the world in what company founder and CEO Lars Dalgaard called "something truly legendary."

While SuccessFactors would not reveal the identity of the customer, three pieces of evidence make it almost certain to be Wal-Mart: first, well-informed sources close to the situation identified Wal-Mart as the customer; second, the list of companies with 2.1 million employees is extremely short; and third, SuccessFactors has 28 offices around the world, and one of them happens to be located in Wal-Mart's corporate hometown of Bentonville, Ark.

So SuccessFactors isn't saying this landmark customer is Wal-Mart but, based on that evidence, I am. And on top of the company's technology, approach, customer-value proposition, and leadership, this megadeal with Wal-Mart provides further evidence for why a few months ago I called SuccessFactors the future of business software.

In a phone conversation yesterday afternoon, CEO Dalgaard described the company's momentum in the broader context of not only that huge customer deal but also SuccessFactors' acquisition of a social-networking company whose technology will enhance its products; the market factors behind the company's strong quarterly performance; and the rapidly growing acceptance of cloud computing and SaaS as truly industrial-strength tools for even the largest-scale organizations.

By the way--talking with Lars Dalgaard is a bit like trying to play cards in a hurricane: it's a truly unique experience, with lots and lots of things are coming at you very quickly and often all at once. His comments are sprinkled with vocal italics and laughter and boldface points and a relentless and and almost manic focus on customers.

Speaking of the 2.1 million-seat customer, Dalgaard said, "This is a company that was being very skeptical about cloud computing, and thinking that the cloud wasn't real, and then a couple of years ago we convinced them to do a trial for 300,000 people. Then not long after that they saw that this is literally--literally!--the way to run the company for the future. And for them to decide in an 18-month framework to jump on another product of ours for succession planning and then go global--global!--with 2.1 million employees, it was just mind-blowing."

To put this Wal-Mart (my contention) deal in context: about 15 months ago, SuccessFactors won a global deal with Siemens for 430,000 seats, and at that time that was widely regarded as by far the largest deployment of an enterprise application. And now, just over a year later, that biggest-ever scale has been increased by a factor of five to 2.1 million, all in the cloud.

"Software has changed forever," Dalgaard said. "Nobody would have believed a deal this big could happen and some big companies till don't believe it but that's okay because they'll come around and they've been conditioned by their own experience, often bad, to have reason to think that this type of software deal just can't happen.

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"But in reality, 300,000 users is now a story of the past because we've proven with this deal that you can go all the way to 2.1 million employees. Nothing like that was ever done before--ever!--and the closest we can find is a client-server deployment PeopleSoft did for the U.S. Army for 600,000 people but you could never do 2.1 million with client-server."

As SuccessFactors' products move out into such broad usage, Dalgaard said, his concern is that the applications have to be able to deliver not just great business value to the company but also a user experience for each individual employee that is engaging, valuable, and effective. The solution? A 12-month hunting expedition:

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