SAP Finally Picks Up The Pace On Cloud - InformationWeek
Cloud // Software as a Service
12:05 PM
Chris Murphy
Chris Murphy
Connect Directly
Building Security for the IoT
Nov 09, 2017
In this webcast, experts discuss the most effective approaches to securing Internet-enabled system ...Read More>>

SAP Finally Picks Up The Pace On Cloud

Its SuccessFactors acquisition is just part of its newfound urgency.

InformationWeek Green - Dec. 19, 2011 InformationWeek Green
Download the entire Dec. 19, 2011 issue of InformationWeek, distributed in an all-digital format as part of our Green Initiative
(Registration required.)
We will plant a tree for each of the first 5,000 downloads.

Chris Murphy If there's one word that describes SAP's cloud software strategy over the past few years, it would be "patient." "Dithering," "timid," and "stalled" also come to mind.

In a flash, though, SAP is shedding its inhibitions. Suddenly, this is a company in a hurry to be a player in one of the most disruptive and important trends in business technology--cloud-based software.

It's all a bit unsettling. SAP was like one of those stately gentlemen always dressed in a proper coat, tie, and hat--never rushed, flustered, or in doubt. Now this dandy's dropped the walking stick and is diving after a ball in the street, suddenly not afraid to get his pants dirty and maybe his nose bloodied.

Its $3.4 billion bid for SuccessFactors is the most obvious sign of SAP's newfound urgency, but it's not the only one.

My colleague Doug Henschen notes the significance of SAP's recent pact to resell cloud-based analytics software from NetBase, to help companies track what customers and potential customers are saying about their brands and products on social networks (see "SAP Tries To Leapfrog On Social Analysis"). It's an area where made one of its biggest moves of the year, buying sentiment analytics provider Radian6. Henschen notes that SAP has its own natural-language processing capability that it could try to nurture into a social analytics product. Instead, it's taking the fast track by reselling a product it'll call SAP Social Media Analytics by NetBase.

SAP also plans in the coming year to hire up to 500 salespeople whose only job will be to sell cloud apps, says Peter Lorenz, executive VP of SAP cloud apps. In the past, SAP salespeople sold all products, and cloud apps took a backseat to big-ticket on-premises software.

With SuccessFactors, the 52% premium SAP agreed to pay shows that it wants a bigger cloud product portfolio quickly. But most telling is what SAP is doing with SuccessFactors CEO Lars Dalgaard. SAP handed him the keys to its cloud strategy and product portfolio, including its cloud-based Business ByDesign ERP suite (see "Top 10 Tech Acquisitions Of 2011").

Dalgaard, who founded SuccessFactors 10 years ago, is a blizzard of passion and ambition. The company makes cloud-based HR and collaboration apps, and while it has a huge number of end users--it says 15 million--it doesn't drive huge revenue from that base. Its sales were only $91 million last quarter, compared with's $584 million and SAP's 3.4 billion euros. Yet that didn't keep Dalgaard, speaking at a Wells Fargo investor conference last month, from sounding like his only real concern was keeping SuccessFactors from conquering the software world too quickly. He talked up its 19 existing products, its plan for more acquisitions like this year's Plateau deal, and its goal of moving into established areas such as financials and expense reporting. "We would already be in financials if we could handle more," Dalgaard said.

Will SAP truly let Dalgaard run with its cloud business? Will it really turn 500 cloud-obsessed salespeople loose? 2012 will be the year for SAP to prove it's past dithering.

Comment  | 
Print  | 
More Insights
Newest First  |  Oldest First  |  Threaded View
How Enterprises Are Attacking the IT Security Enterprise
How Enterprises Are Attacking the IT Security Enterprise
To learn more about what organizations are doing to tackle attacks and threats we surveyed a group of 300 IT and infosec professionals to find out what their biggest IT security challenges are and what they're doing to defend against today's threats. Download the report to see what they're saying.
Register for InformationWeek Newsletters
White Papers
Current Issue
2017 State of IT Report
In today's technology-driven world, "innovation" has become a basic expectation. IT leaders are tasked with making technical magic, improving customer experience, and boosting the bottom line -- yet often without any increase to the IT budget. How are organizations striking the balance between new initiatives and cost control? Download our report to learn about the biggest challenges and how savvy IT executives are overcoming them.
Twitter Feed
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.
Flash Poll