SAP Has Zero Interest In Buying Salesforce.com

Integrated value of SAP products helps bridge data divide

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SAP is not interested in acquiring Salesforce.com, according to company CEO Bill McDermott who responded flatly to a question raised by Apps Run The World on the first day of SAPPHIRE NOW.

“We have zero interest in buying Salesforce.com,” said McDermott, adding that he views Salesforce.com competing primarily in the Sales Force Automation part of the CRM market, a segment that is fast turning into commodity.

McDermott also commented that SAP’s existing customer engagement applications, including recent acquisitions of entities such as Hybris for omnichannel commerce, present greater value to its customers than what Salesforce.com can offer.

The comments ended speculation that SAP would be a suitor for Salesforce.com following recent news reports that the No. 1 Cloud applications vendor has been in play over the past week.

Safra Catz, CEO of Oracle, also indicated in her public comments that Oracle would not be acquiring Salesforce.com, leaving a handful of companies that have the wherewithal such as Microsoft, Google and perhaps private equity firms as the most likely acquirer of Salesforce.com.

The SAP’s position on Salesforce.com is consistent with the key theme of McDermott’s keynote at SAPPHIRE NOW, which attracts about 16,000 attendees this week in Orlando.

Bridging data divide, as McDermott describes it, encapsulates SAP’s current strategy, which revolves around its SAP HANA in-memory database platform, an array of on-premise and Cloud applications as well as the Business Network for functions like Ariba eProcurement, Fieldglass contingent labor management and Concur travel and expense management.

Because SAP is standardizing all of its technologies including newly acquired applications to run on SAP HANA, the value proposition is to present its customers with a single version of truth. SuccessFactors for HCM, for example, will be transitioning away from technologies like Dell Boomi for Cloud integration and Oracle Database in favor of HANA Cloud Integration and SAP HANA, respectively.

Buying Salesforce.com would mean the reversal of that approach since such an acquisition – entailing the addition of more than 16,000 employees, nearly $6-billion in revenues and an extensive portfolio of Cloud platform and applications products, would result in considerable complexity and difficulty. All of that would run contrary to the Run Simple message that SAP has been crafting and perfecting for the past few years.

According to McDermott, if two people are drawing their conclusion from the same data set, one of their views is redundant. For decision makers like McDermott, the CEO of a $18-billion company with 74,000 employees, is to encourage fresh insights and approaches from all basing their narratives on the common data platform. Buying Salesforce.com would derail the bridging data divide value proposition.

What’s more likely is that SAP – now seizing its open architecture as one of its key value propositions – would reach out and partner with Salesforce.com through open APIs in order to ease integration burden for customers running products from both vendors.

In that vein, McDermott spoke at length during his keynote about other partnerships including Google and Facebook, allowing all the parties involved to deliver tangible business value especially for enterprises investing heavily in Google enterprise products like Google Work as well as Facebook’s corporate clients for social marketing.

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