Last few days have been a lot of fun in EnSW world in terms of acquisitions. Two that picked the most interest in my mind were SAP buying SuccessFactors and SalesForce buying Rypple. It is not just the companies alone – it is the people who are going to run them that interest me more.
Lars Dalgaard founded SuccessFactors and is CEO there. He is now going to run SAP’s cloud offerings. From everything I have heard so far – he is a prize catch for SAP, and is probably a future CEO or Co-CEO candidate. But in the short term, I think the role he will play really well will be to go toe-to-toe with Marc Benioff and other cloud company CEOs. SAP needs one such player in their executive team to go play the offense side of the game. Defense is pretty well covered with the talent they have already.
Then we heard Marc Benioff got John Wookey to join him at SFDC. And today we heard he will be the head of SuccessForce, the new name for Rypple. What a master stroke – I tip my hat to Benioff. He learned the game at the knees of the best player and coach – Larry Ellison. And by all counts, he is as good as Larry now in upsetting competitors, and does not mind giving Larry himself a hard time. SFDC is a good partner of Workday, but that is not whom they bought. They insist there is no conflict with workday regarding this acquisition – but I am not buying this fully.
The beauty of this game is that Benioff did not pay anything hefty apparently for Rypple from what I read on internet articles and press releases. SAP paid a pretty good premium for SFSF. I am now trying to find out how much similarity exists in the solutions. What caught my attention is that the hippest company on the planet now – Facebook – uses Rypple.
In terms of technology – I don’t see any one having an edge here. SFDC is not exactly spanking new technology, and neither is SAP. Both will have to integrate new stuff into existing code base somehow. In terms of fun to use – Rypple has an edge on gamification, while SAP is still “working on it”.
What about talent – this is where I think hiring Wookey was Benioff’s master stroke. Wookey has a cult like following. I know many of his former employees who will lay down on tracks for him. Now the question in my mind is how many of them will quit their current jobs – some work in SAP too – and go join Wookey in his new team. If SAP has anything to worry – this potential for talent drain is the biggest in my opinion. Of course Lars Dalgaard will bring his own team into SAP, so this might not be a big deal after all. But a lot of ground SAP covered on Design Thinking etc might be lost if they lose key talent. I hope SAP takes care of their top talent in OD appropriately.
Of course I expect SAP’s lawyers to go after SalesForce for renaming Rypple as SuccessForce, which sounds pretty similar to SuccessFactors. However, since SAP will probably not keep the SuccessFactors brand alive – I am not sure if they will do this. But it will be an effective way to delay the transaction from closing. Benioff knows the mileage ORCL got on PR when they went after SAP in courts. So even if he loses the battle on the name itself, he might get enough to consider himself successful in the PR war.
I am pretty curious on what will happen to Workday now. They will for sure have a fantastic IPO, since SAP and SFDC have ensured great valuation by their actions. But will some one remaining in the market scoop Workday up on an exceptional premium? I expected SFDC to buy them, but that is not how it played out. Lets see how that plays out. Either way – Workday founders will retire rich.
Big enterprise cloud players now need a good middleware company to strengthen their portfolio. There has been plenty of speculation of SAP buying TIBCO. But instead, they announced a partnership. Fair enough – but I think they are a prime acquisition target now . It could be the differentiator between Market leader and the rest. But I could be totally wrong here given TIBCO has stayed neutral, despite growing to Billion dollar size.
Q1 of 2012 will surely be a lot of fun – but who knows, we might see even more exciting news before 2011 says good bye.