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

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.

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.
Show Comments

Blog Posts

Building a human-curated brand

If the FANG (Facebook, Amazon, Netflix, Google) sector and their measured worth are the final argument for the successful 21st Century model, then they are beyond reproach. Fine-tuning masses of algorithms to reduce human touchpoints and deliver wild returns to investors—all with workforces infinitesimally small compared to the giants of the 20th Century—has been proven out.

Will Smith

Co-founder and head of new markets, The Plum Guide

Sustainability trends brands can expect in 2020

​Marketers have made strides this year in sustainability with the number of brands rallying behind the Not Business As Usual alliance for action against climate change being a sign of the times. While sustainability efforts have gained momentum this year, 2020 is shaping up to be the year brands are really held accountable for their work in this area.

Ben King

CSR manager & sustainability expert, Finder

The trouble with Scotty from Marketing

As a Marketer, the ‘Scotty from Marketing’ meme troubles me.

Natalie Robinson

Director of marketing and communications, Melbourne Polytechnic

It's a pretty interesting article to read. I will learn more about this company later.

Dan Bullock

40 staff and 1000 contracts affected as foodora closes its Australian operations

Read more

If you think it can benefit both consumer and seller then it would be great

Simon Bird

Why Ford is counting on the Internet of Things to drive customer engagement

Read more

It's a good idea. Customers really should control their data. Now I understand why it's important.

Elvin Huntsberry

Salesforce CMO: Modern marketers have an obligation to give customers control of their data

Read more

Instagram changes algorithms every time you get used to them. It really pisses me off. What else pisses me off? The fact that Instagram d...

Nickwood

Instagram loses the like in Australia; industry reacts positively

Read more

I tried www.analisa.io to see my Instagram Insight

Dina Rahmawati

7 marketing technology predictions for 2016

Read more

Latest Podcast

More podcasts

Sign in