Enterprise software maker SAP AG is getting in on the summer acquisitions with a bet on e-commerce. SAP has announced plans to acquire hybris for its e-commerce technology, 500-company clientele, and more leverage against arch rivals Oracle, IBM, and Salesforce.com, in the areas of CRM and ERP.
Founded in 1997, Switzerland-based hybris (with a small 'h') offers an "omni-channel" commerce platform that incorporates Web, mobile, call center and store solutions. The goal is to help businesses sell more goods, services and digital content through every touch point, channel and device.
Hybris reports that more than 500 companies around the world are already using its e-commerce technology, including global B2B sites W.W. Grainger, Rexel, General Electric, Thomson Reuters, and 3M, as well as consumer brands Toys"R"Us, Metro, Bridgestone, P&G, Levi's, Nikon, Galeries Lafayette, Migros, Nespresso and Lufthansa. The company has operations in 15 countries.
$37 Billion and Counting
As SAP explains it, the hybris acquisition will position SAP to deliver a next-generation e-commerce platform with the choice of on-premise or cloud deployment. By integrating hybris technology, SAP said, it can offer new data and tools that enterprises need to optimize margins and customer loyalty.
"With hybris, SAP has made a decisive move to raise the stakes in customer relationship management and define the next-generation customer experience," said Bill McDermott and Jim Hagemann Snabe, co-CEOs, SAP AG. The execs didn't specifically call out competitor Salesforce, but it's clear that the company is hoping to edge in on the CRM market with its latest acquisition.
The company has noticed that consumers and businesses alike are demanding a seamless brand and shopping experience across all channels. SAP is also pointing to research that shows the e-commerce tech market is growing fast and is worth about $37 billion.
Countering Oracle and IBM
Zeus Kerravala, principal analyst at ZK Research, told us Oracle has made significant strides in customer simplicity and this acquisition is one of SAP's way of countering that move.
"A lot of the value of customer intelligence comes through the analytics tools, and obviously that's much harder to build than it is to buy," Kerravala said. "Certainly, this was SAP's fastest track to market. It does fill a pretty big void in their portfolio."
Peter Sheldon, Principal Analyst at Forrester Research, also pointed out that SAP has had a huge void in its offerings compared against Oracle as well as IBM. SAP, he explained, has been lacking an enterprise commerce platform, and that's made it difficult for SAP to compete effectively against IBM and Oracle.
The difference has been most notable over the past few years, since IBM and Oracle each made their own billion-dollar e-commerce acquisitions. Sheldon concludes that the situation "simply came to a boiling point," resulting in SAP's decision to buy rather than build its own e-commerce platform.
SAP did not disclose financial terms of the deal, but did say that hybris will be operating as an independent business unit under SAP.
Customer Engagement Is Key
SAP is convinced that Big Data, cloud and social technologies only heighten demand for innovative commerce solutions to manage consistent customer engagement. Growing at more than twice the rate of the retail industry, the company said e-commerce is increasingly recognized as a critical capability in identifying, winning, and growing profitable customer relationships.
Part of the success depends on Hana, SAP's analytical and cloud apps, as well as the SAP Jam social software platform. SAP believes its existing platforms will give it a competitive advantage. And when the company launches its 360 Customer solution, the acquisition will offer enterprises even more tech firepower to engage customers to improve loyalty and create stronger, more valuable relationships.
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