SAP Lays Out Product Direction Post-SuccessFactors Deal
Analyst: SAP's plans reflect competition from the likes of Workday for cloud-based HR software
IDG News Service (Boston Bureau) — SAP on Wednesday released details for its road map for HCM (human capital management) software following the US$3.4 billion acquisition of SuccessFactors, which focuses on cloud-based applications.
SuccessFactors is to be run as an independent subsidiary of SAP, with its CEO, Lars Dalgaard, continuing in that role as well as leading SAP's broader cloud strategy.
Now SuccessFactors' Employee Central product will be "the go-forward core human resources (HR) offering in the cloud," and SAP will "boldly invest" in it, according to a statement. SAP will continue selling its on-premises HCM application, for which it plans "significant investments in functionality, user experience, mobile and in-memory technology capabilities in the future," the company added.
For talent management applications, which cover areas such as recruitment and employee pay, a number of SuccessFactors products will lead the way. These include SuccessFactors Performance Management, SuccessFactors Compensation Management, SuccessFactors Recruiting and SuccessFactors Learning Management, along with the Jam "social learning" application, SAP said. Talent management capabilities within the on-premise HCM product "will be continued with selected innovations for the next decade," it added.
SAP also plans to make integrating the SuccessFactors software with its HANA in-memory database a "key priority," both for improved analytics and faster processing times, according to a statement.
Integration of SuccessFactors' portfolio and SAPs on-premises HR software is also planned, as well as increased development of integration with third-party applications.
SAP was SuccessFactors' "toughest competitor," but now SuccessFactors will be able to sell more effectively into SAP's much larger installed base, Dalgaard said in an interview. The companies currently have a roughly 14 percent overlap in customers, according to a statement.
Dalgaard has been meeting with SAP executives, including board member and technology chief Vishal Sikka, and the talks have gone very well, he said.
He described the merger as beneficial for both companies.
For one, while localization has always been a strength of SuccessFactors, joining SAP gives it "the domain expertise that we don't have, and it would be very hard to get," Dalgaard said. "It's just going to be a lot easier than it was."
Work is already under way to integrate the companies' products. SuccessFactors actually made an investment in HANA some time ago and "started out with five projects in parallel," Dalgaard said. "We're already seeing positive results there." However, he declined to provide specific timelines for the completion of that work and other integration projects.
Meanwhile, some observers have questioned whether SAP should try to reduce the amount of cloud development platforms and architectures it has following the SuccessFactors deal, in the interest of streamlining and focusing its overall efforts in the cloud.
