SAP agrees $4.3bn deal for Ariba

By Graeme Burton
23 May 2012 View Comments
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SAP is to buy collaborative commerce software and cloud-service provider Ariba in a deal valuing the company at $4.3bn (2.7bn). The deal is part of SAP's belated attempt to expand its presence in the cloud after a decade in which cloud specialists, such as, Workday and NetSuite, have established themselves as rivals in enterprise software.

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The Ariba acquisition follows the December 2011, $3.4bn (£2.16bn) purchase of SuccessFactors, whose CEO, Lars Dalgaard, now heads up SAP's cloud division.

In a leaked memo, Dalgaard identifies and Workday, the human resources cloud services company founded by Dave Duffield, as the two cloud companies "most likely to hurt SAP's customer base" and outlines a strategy intended to make SAP the number one cloud services company by 2015, measured in terms of applications offered and total sales volumes.

Dalgaard has established two dedicated sales teams to target these two companies with specially crafted suites of cloud software packages. These will combine human resources software with finance to take on Workday; and customer relationship management (CRM), procurement, SAP Business ByDesign and Social Customer Engagement onDemand to take on

"We need less products and [to] focus more of our great people, from development to sales and customer support, on fewer products that can compete now and sell now. We need to do [more] to make SAP credible, then we can become relevant and competitive in the cloud. Then we can accelerate pipeline and then excite customers, close a lot of business, then implement it in weeks, not months," wrote Dalgaard in the memo.

Part of Dalgaard's strategy has involved migrating SAP's internal systems to SuccessFactors' infrastructure, replacing solutions from Salesforce, Concur, RightNow, Netsuite, OpenAir, Coupa, Avalara and Onbase in the process.

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