Menu
What SAP's $8B acquisition of SaaS vendor Qualtrics means

What SAP's $8B acquisition of SaaS vendor Qualtrics means

After a somewhat surprising acquisition of the experience data specialist Qualtrics, Computerworld UK digs into what SAP sees in the Utah-based SaaS company

Credit: Peter Sayer/IDG

German enterprise software giant SAP has swooped to purchase Utah-based unicorn Qualtrics for $8 billion, just as the software-as-a-service (SaaS) survey platform was preparing for an IPO.

The somewhat surprise purchase, all in cash, comes just after Qualtrics had set its IPO price range at $18-21.

It stated in its IPO filing that revenue for the first half of 2018 jumped 42 per cent to $184 million, far outstripping its rival SurveyMonkey, which also went public this year. It was most recently valued at $2.5 billion after a 2017 funding round.

Qualtrics was built by Ryan Smith after he dropped out of college to spend time with his seriously ill father, an academic at Brigham Young University.

It originally targeted academic institutions to streamline research, but has since grown into what it calls the experience management (XM) platform to be an effective tool for enterprises like Adidas and BMW to collect rich customer, product, employee and brand feedback in a software-as-a-service (SaaS) platform where it can be mined for insights.

In a blog post published yesterday, Robert Enslin, president of the Cloud Business Group at SAP, wrote: "Unlike typical feedback and survey mechanisms, Qualtrics’ XM Platform provides a real-time aggregation of feedback from any engagement method — direct customer survey feedback, social, web, in-app, email, and more."

"This is a very transformative moment. With this union, we are poised to combine over one billion records of experience data together with operational data from 77 per cent of the world’s transactions touched by an SAP system.

"The two richest data sets in the economy — experience data (X-data) from Qualtrics that tells you why and operational data (O-data) from SAP that tell you what is happening — paint a complete picture that fuels intelligent enterprises so they can deliver superior experiences: a virtuous cycle."

Speaking on stage during the UK and Ireland SAP user group (UKISUG) conference in Birmingham, which Computerworld UK is attending, SAP executive board member Adaire Fox-Martin said that the acquisition helps "create a powerful and unique opportunity for our customers to mix the operational data of SAP with Qualtrics experience data."

By combining SAP's Enterprise Resource Planning (ERP), CRM and Human Capital Management (HCM) operational data with Qualtrics experience data she believes SAP can offer "a very unique operational and management system from the first customer interaction, through to delivery and after-sales service."

This also plays into SAP's recent tendency towards SaaS platforms, both through acquisitions of line-of-business vendors like SuccessFactors (HR), Concur (travel and expenses) and Hybris (ecommerce), and by re-architecting its own line of business applications to be consumed 'as-a-service.'

Qualtrics is one of a small cohort of unicorn-valued companies out of Utah, following in the steps of training specialist Pluralsight and analytics vendor Domo, which both recently went public, as well as Insidesales.com, which is eying an IPO soon.

Following the closing of the transaction, Smith will continue to lead Qualtrics out of its dual headquarters in Provo, Utah and Seattle, but as part of SAP’s Cloud Business Group.

As part of the announcement, Smith said: “Our mission is to help organisations deliver the experiences that turn their customers into fanatics, employees into ambassadors, products into obsessions and brands into religions. Supported by a global team of over 95,000, SAP will help us scale faster and achieve our mission on a broader stage."

The German software giant is looking to take on Salesforce in the lucrative customer relationship management (CRM) space, as shown by its launch of C/4HANA at the Sapphire conference earlier this year.

With Qualtrics they are getting the other side of that coin, the qualitative customer data to go with the operational data they have historically held for companies.

How they combine the two products in a way that makes sense to customers, and is cost effective, while Smith keeps control of the company's unique culture and brand, will be the challenge from now on.


Follow Us

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags CloudSaaSMergers and acquisitionssoftwareSAPcustomer experience managementQualtrics

Featured

Slideshows

The making of an MSSP: a blueprint for growth in NZ

The making of an MSSP: a blueprint for growth in NZ

Partners are actively building out security practices and services to match, yet remain challenged by a lack of guidance in the market. This exclusive Reseller News Roundtable - in association with Sophos - assessed the making of an MSSP, outlining the blueprint for growth and how partners can differentiate in New Zealand.

The making of an MSSP: a blueprint for growth in NZ
Reseller News Platinum Club celebrates leading partners in 2018

Reseller News Platinum Club celebrates leading partners in 2018

The leading players of the New Zealand channel came together to celebrate a year of achievement at the inaugural Reseller News Platinum Club lunch in Auckland. Following the Reseller News Innovation Awards, Platinum Club provides a platform to showcase the top performing partners and start-ups of the past 12 months, with more than ​​50 organisations in the spotlight.​​​

Reseller News Platinum Club celebrates leading partners in 2018
Meet the top performing HP partners in NZ

Meet the top performing HP partners in NZ

HP has honoured its leading partners in New Zealand during 2018, following 12 months of growth through the local channel. Unveiled during the fourth running of the ceremony in Auckland, the awards recognise and celebrate excellence, growth, consistency and engagement of standout Kiwi partners.

Meet the top performing HP partners in NZ
Show Comments