The Key To A Successful SuccessFactors Acquisition For SAP - InformationWeek
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The Key To A Successful SuccessFactors Acquisition For SAP

The enterprise software vendor must move fast to get this acquisition right and get it right the first time.

As the enterprise software market parses the news that SuccessFactors will become SuccessFactors, an SAP company, the question of how well SAP manages its M&A strategy is coming to the fore.

SAP has been buying small and large companies for a while, though nowhere near as avariciously as Oracle or IBM. There are now three big buys--BusinessObjects, Sybase, and SuccessFactors--and countless smaller ones--most recently Right Hemisphere and Crossgate--to look at in judging how well SAP is doing in the M&A business.

The short answer is easy: not well enough. That's not to say that SAP is screwing up (though the early days of the BusinessObjects acquisition were hardly smooth sailing). But it does say that the company needs to have a better-oiled M&A strategy to match the well-oiled technology and go-to-market strategy it's trying to build with these acquisitions.

The current case in point is mobile: The acquisition of Sybase was announced more than 18 months ago--eons ago in the tech world--and SAP's mobile strategy is still fragmented. There are some great gems amidst the fragments, and the SAP Mobile Apps store is a good starting point for understanding (not using since the apps aren't available yet) where SAP is going. But it seems that every time I turn around, there's another mobile app from another group at SAP that isn't necessarily connected to a pan-SAP strategy.

[ Find out more about SAP's SuccessFactors acquisition in Doug Henschen's Should SAP + SuccessFactors Worry ]

While this fragmentation is hardly a disaster, it does speak to the larger question of what happens when SAP buys a big technology company. One can argue whether Sybase was a good buy and whether Sybase Unwired Platform and Afaria are the be-all and end-all of mobile enterprise platforms, but it should go without saying that spending upwards of $6 billion on Sybase, not to mention the extraordinary executive time and effort that went into that deal, should have put an end to internal fragmentation. Instead, it's clear that a unified, singular mobility strategy is still pending.

We saw a similar effect with the BusinessObjects acquisition: fragmentation, competing product lines, and internal struggles over product and technology strategy. It's easy to forgive SAP the chaos of the early years of that acquisition, considering its indisputable strength in BI and analytics today, but it was a pretty messy process that took, in my opinion, too long to sort out.

Part of what's going on is the bi-polarity of the world of SAP. There's more than continents and oceans that divide SAP's Waldorf and Palo Alto offices. The cultural gap between them, however smoothed over by moving personnel back and forth, and having both the CMO and CTO sitting in Palo Alto, is still vast and complex. This bipolarity pits different design, development, and business culture factors against one another in a global battle that's won as much by attrition as it is by the pure merit of one or another choice.

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