SAP Builds Out Services Menu With SuccessFactors - InformationWeek

InformationWeek is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

Cloud // Software as a Service
01:31 PM
Eric  Lundquist
Eric Lundquist
Connect Directly

SAP Builds Out Services Menu With SuccessFactors

Purchase is latest move as enterprise software vendors race to develop a cloud presence and offer business resources to customers eager to use cloud-based services.

SAP spent $3.4 billion on Saturday to buy cloud-based, employee-performance-management success story SuccessFactors. The purchase makes a lot of sense and highlights the race among the big enterprise software vendors to build both a greater cloud presence and a stack of business resources for customers anxious to use cloud-based services to create or replace corporate capabilities. The traditional vendors, including Oracle, need to offer a range of capabilities and they are better off spending some of their stacks of cash rather than try to build the functions.

Enterprise CIOs and senior level execs are now using the menu model for human resource services, marketing business intelligence, project management, and all the functions that define the modern corporation. The hallmarks of these services are a Web-based presence, social network-like interfaces, and rapid deployment to increasingly mobile workforces.

SuccessFactors has had a quick rise since its founding in 2001 as a "business execution software" company. The idea, as I saw it, was to build, measure, and improve employee capabilities aligned with a company's strategic goals. The idea had been around for a while, but creating the software platform to accomplish the idea was missing.

SuccessFactors is a good fit for SAP as it gives the company a much-needed stronger cloud presence and a broader range of corporate customers. SAP will need to show it can both allow SuccessFactors independence while bringing in the resources of SAP.

Global CIO
Global CIOs: A Site Just For You
Visit InformationWeek's Global CIO -- our online community and information resource for CIOs operating in the global economy.
The bigger trend is the buildout by vendors of corporate capability stacks. Recently, introduced more marketing services to its portfolio, in addition to its existing sales management capabilities, and has been talking about adding project management. Oracle recently bought RightNow Technologies for $1.5 billion to augment its cloud-based customer service offerings. The idea of a one-stop shop for cloud-based corporate capabilities will appeal to CEOs and CIOs that want to deal with one vendor. The concept is in conflict with "best of breed" stack buildouts, where executives can pick and choose the applications that best fit their organization.

With SuccessFactors purchased, other companies in this employee-performance area include Workday, a company based on the concept of cloud-based enterprise business management services, which has risen to be a strong challenger to traditional in-house business service applications. Taleo is probably the closest in offering SuccessFactors-type services and should expect some large suitors to come knocking as the SuccessFactors/SAP story unfolds.

Eric Lundquist,
VP and Editorial Analyst, InformationWeek
[email protected]

The Enterprise Connect conference program covers the full range of platforms, services, and applications that comprise modern communications and collaboration systems. It happens March 25-29 in Orlando, Fla. Find out more.

We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
Comment  | 
Print  | 
More Insights
The State of Chatbots: Pandemic Edition
Jessica Davis, Senior Editor, Enterprise Apps,  9/10/2020
Deloitte on Cloud, the Edge, and Enterprise Expectations
Joao-Pierre S. Ruth, Senior Writer,  9/14/2020
Data Science: How the Pandemic Has Affected 10 Popular Jobs
Cynthia Harvey, Freelance Journalist, InformationWeek,  9/9/2020
White Papers
Register for InformationWeek Newsletters
Current Issue
IT Automation Transforms Network Management
In this special report we will examine the layers of automation and orchestration in IT operations, and how they can provide high availability and greater scale for modern applications and business demands.
Flash Poll