History of SAP Acquisitions

In 4 decades of history of SAP, it has made three major acquisitions till now - Business Object, Sybase and SuccessFactors - to fill the gaps in its product portfolio.

In the four decades of its history, SAP has made three major acquisitions till now. SAP had chosen to grow organically and was enthusiastic about its home-grown meticulously designed and engineered products and services while archrival Oracle’s desire to grow quickly resulted in an acquisition spree worth above $42-billion since 2005. SAP criticized Oracle for its acquisition strategy.

SAP change in attitude from growing organically against Oracle acquisition strategy was triggered by Oracle’s purchase of Hyperion Solutions in 2007. Oracle announced to acquire Hyperion in February, 2007 in a $3.3-billion deal to expand in the area of performance management systems.

Before that Oracle had acquired Customer Relationship Management (CRM) software maker Siebel Systems for $5.85-billion in 2006 and PeopleSoft for $10.3-billion in 2005. The earlier acquisitions by Oracle were seen as a consolidation in the ERP market but Hyperion takeover was different as it was not having product overlap with Oracle and filled an important space in its product offerings.

Though SAP dismissed this development as unimportant and commented that since Oracle was unable to grow on its own so it resorted to attempting to acquire customers.

Thousands of SAP customers were using Hyperion business intelligence software to analyze data from the underlying SAP ERP software. This move by Oracle was taken as an attack on SAP territory (its customers) as all of a sudden Oracle had a reach to these customers.

Taking a queue and dropping its attitude on growth via inorganic channels, SAP broke the tradition and announced in October, 2007 that it agreed to buy Business Objects for Euro 4.8-billion ($6.7-billion) – a hugely successful company in Business Intelligence space.

It was the first major acquisition in the entire history of SAP. Business Objects had some 43,000 customers mostly from the Fortune 500 companies. The acquisition aimed at furthering SAP’s reach to small and medium-sized companies and expanding into one of the business software’s hottest sectors. It created more sales opportunity for SAP in combination with its own applications. Read more ...

SAP had its own business intelligence product called SAP BI or BW, but it was not successful in creating a considerable market for the company and this space was overpowered by other vendors like Business Objects, Hyperion, Cognos, SAS, etc. As Hyperion was already acquired by Oracle and with Business Objects acquisition by SAP, the business intelligence market was further consolidated leaving a few independent players.

In a second major takeover move, SAP acquired Sybase in year 2010, a mobile software maker. It was a strategic move and positioned the company to become a significant player in the mobile enterprise software enabling SAP to provide additional flexibility to its customers. Read more ...

The recent acquisition from SAP was aimed at bringing Cloud software expertise to the company. SAP decided to acquire SuccessFactors, the acquisition being underway and will be complete sometime in the first quarter of 2012.

Apart from the cloud technology knowhow, SuccessFactors will bring cloud-based on-demand human capital management application-set to the SAP portfolio, which will be part of the SAP enterprise solutions. Read more ...

With these acquisitions, SAP seems to have what it needs as a part of its strategy for the future. But as nobody knows what shape the technology can take in the coming years, there may emerge new driving factors of growth.

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