In the last few months, SAP has expanded its portfolio of business software with mobility and cloud assets, through the acquisitions of global companies Ariba and Syclo. Kirsten Wade reports.
SAP acquired Syclo in April this year, as a growth opportunity to enhance its mobile solutions by utilising Syclo’s building and selling expertise across a variety of industries.
Syclo is an established SAP partner, with more than 600 customers in 39 countries and multiple industries, including utilities, oil and gas, life sciences and manufacturing. According to SAP, Syclo’s expertise and technology offers a mature set of applications that will complement SAP’s offering in key mobile areas such as enterprise asset management (EAM), field services, inventory management and approvals/workflow.
The acquisition will also enable the acceleration of the adoption and deployment of new mobile asset management and field service solutions on SAP’s Sybase Unwired Platform.
Sanjay Poonen, president, global solutions, SAP, said the Syclo acquisition “adds momentum to our already powerful mobile portfolio, advancing our vision and leadership while accelerating our mobile apps”.
“Syclo brings both domain-savvy expertise and industry-leading solutions, as recognised by customers and analysts,” he said. “This will drive innovation and mobility in the workplace.”
A little over two months after the acquisition of Syclo, SAP acquired Ariba, an international cloud-based business commerce network, for US$4.3 billion. The Ariba board of directors unanimously approved the transaction, which is expected to close in the third quarter of 2012. Ariba’s established buyer-seller network and connection to more than 730,000 suppliers were some of the drawcards for SAP.
The acquisition marks the expansion of SAP’s cloud strategy into the B2B trading market. SAP co-CEOs Bill McDermott and Jim Hagemann Snabe said the Ariba acquisition would enable SAP to innovate and take advantage of shifts in the way people interact currently being driven by cloud technology. “Cloud-based collaboration is redefining business network innovation, and we are catching this wave in the early stage of its evolution. The addition of Ariba will create the business network of the future, deliver immediate value to our customers and provide another solid engine for driving SAP’s growth in the cloud.”
Rodney Gedda, senior analyst, Telsyte, said these two acquisitions highlight SAP’s recognition of the increasing mobile trend.
“As the world becomes more mobile, SAP will continue to invest in mobile applications and mobile-enabling technologies. So even though it has an established base of enterprise ERP customers, it knows it needs to enable its core software offerings to a larger, more mobile customer base,” he said.
Gedda said both acquisitions enable SAP to broaden their business software portfolio.
“The acquisitions makes sense as much as any other acquisition by a tier-1 software company. They are always looking to expand their suite of offerings through a combination of development and acquisitions.” The underlying benefit of these additions to the SAP family, Gedda said, is that they complement the company’s current portfolio and offer new opportunities. “SAP already has products and services in these areas, but as with any acquisition by a large vendor, there will be areas of crossover where there is an opportunity to broaden, or enhance, existing offerings.” However, success now depends on how well the companies can be integrated into its established product lines, and their expertise and assets utilised.
In considering future acquisitions, Gedda adds, “what SAP wants to avoid is buying companies it thinks are good for its overall business but end up being shelved or poorly integrated into its mainstream products”.
This article was first published in Inside SAP Winter 2012.
