
SAP to acquire Qualtrics - peterkshultz
https://news.sap.com/2018/11/sap-to-acquire-qualtrics-experience-management/
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twtw
I found this excerpt from their S-1 interesting:

> We use open source software in our platform that may subject our platform to
> general release or require us to re-engineer our platform, which may harm
> our business.

> We use open source software in our XM™ Platform and expect to continue to
> use open source software in our platform in the future. There are
> uncertainties regarding the proper interpretation of and compliance with
> open source software licenses. Moreover, we cannot assure you that our
> processes for controlling our use of open source software in our XM™
> Platform have been or will be effective. Consequently, any of these
> circumstances could result in reputational harm and harm to our business and
> results of operations. In addition, if the license terms for the open source
> software we utilize change, we may be forced to re-engineer our platform or
> incur additional costs to comply with the changed license terms or to
> replace the affected open source software. Although we have implemented
> policies and tools to regulate the use and incorporation of open source
> software into our XM™ Platform, we cannot be certain that we have not
> incorporated open source software in our platform in a manner that is
> inconsistent with such policies.

Can someone more familiar with these filings comment on whether this is
typical, or is this corporate speak for "we are violating the GPL and hope no
one can prove it?"

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whoisjuan
From all the S-1s I have read, this seems like a typical disclaimer. More than
anything is a guidance on the use of OSS and the risk that comes from using
non-propietary technology (which includes releasing software written on top of
the questioned technology). The way I see it, it's more of an indication on
potential future litigation (e.g: Google vs Oracle), not so much of the cost
of re-writing software, although I'm sure this is included because it seems
like the reasonable thing to do if you're using software with a license that
is potentially harmful to your business' economic interests.

This is why companies care about OSS licenses and sudden changes in those
licenses. It's not out of pettiness. Automattic dropped React just for this
very reason.

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sbr464
Sorry, but your info is a bit out of date. The latest Wordpress Gutenberg uses
React.

~~~
snorremd
I even suspect Automattic's initial choice to not use React because of the
open source license + patents clause was a direct catalyst for Facebook to
change the React license, thereby allowing Automattic to use React. Wordpress
drives a substantial percentage of the world's websites, so it was probably in
Facebook's interest that React was used in project Gutenberg.

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dmode
Having worked previously at another SAP acquisition, this is pretty much the
beginning of end for Qualtrics

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AndyNemmity
Depends on the acquisition, several have went well.

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gaius
Do you have any examples?

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majewsky
Acquisitions like Concur/Hybris/Successfactors are a big part of why SAP is
currently doing quite well, and the board acknowledges as much.

Disclosure: I work at SAP and hold a few shares.

~~~
swarnie_
Slightly off topic, what's the culture like at SAP? We've recently picked up a
few top level SAP bods to run our smaller business, the changes have been both
rapid and dramatic.

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majewsky
I'm at a mid-sized German office (in Dresden, about 500 employees), and it's a
pleasant work culture overall. Sure, there's ample bureaucracy and office
politics (as with any large company), but I can easily see myself working here
until retirement if the work continues to challenge me (in a positive way) as
it does now.

It probably helps that my direct manager is shielding us from a lot of the
bureaucracy and allowing us lots of individual freedom wrt technical decisions
(our team sometimes feels more like a small startup embedded within the
company). But people from other teams seem (mostly) happy with their positions
as well.

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twtw
> acquire all outstanding shares of Qualtrics for US$8 billion in cash

2017 profit of $2.6M on revenue of $290M. Please ELI5, how does someone decide
on a price 26x higher than earnings?

EDIT: 3077x earnings - thanks 'adventured.

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adventured
> how does someone decide on a price 26x higher than earnings?

That's 3,077x earnings. $2.6m vs $8b. 26x would be a great price in this
market.

For the same reason Facebook paid a billion dollars for Instagram, with zero
revenue (or Google & YouTube). Aggressive speculation on the future outcome
(growth) of what they're buying. They're plausibly betting Qualtrics might be
a $3b sales division some day, yielding $500m in profit, or similar. They're
willing to pay up now for those hopeful future profits, to take them off the
market before a competitor does or Qualtrics gets far larger and more
expensive in the future. Definitely a very rich premium they're paying (from
SAP's side, it's equivalent to two years of their after-tax profit).

~~~
twtw
> That's 3,077x earnings

Whoops. Thanks, updated.

Coming from experience with semiconductor companies years back, 3-4x earnings
was a typical acquisition price. This speculation on growth is very
interesting to me.

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nylonstrung
Recurring SaaS revenue with good retention is highly predictable with 80-90%
gross margins and requires essentially no CapEx to scale, which is in stark
contrast to the semi world.

You are also seeing YoY growth that can be orders of magnitude greater

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userbinator
Apparently "experience management" is now the euphemism of choice for user-
tracking... I have their domains blocked in my HOSTS file, and they're one of
the ones known for tracking mouse movements and clicks on pages. I hope I do
not have to block SAP too...

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Rjevski
> I do not have to block SAP too...

Just FYI, nothing of value will be lost if you do.

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devmunchies
This is very surprising. They were prepping to go public for a couple years,
even stacking their c-suite with ex-microsoft executives.

(I left Qualtrics a year ago.)

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malshe
I am baffled by the valuation. I use Qualtrics often for data collection but I
never knew it was valued at multiple billions. What's their main revenue
source? I don't believe that B Schools pay them so much to warrant this kind
of valuation.

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CapnCrunchie
They sell to enterprises. They have customers like BMW, Southwest, etc. They
get MBAs to learn to use them in school, then when they have to use a product
when they get a job at a fortune 500, they go with Qualtrics since they know
how to use it. That's how they got a lot of market penetration.

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vimarshk
End of Qualtrics for the most part. Positive for companies like Survey Monkey.

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mrkstu
Biggest exit by a Silicon Slopes (Utah) company (by far)?

Ancestry.com was 1.6B, Omniture 1.8B.

Plural sight and Domo maybe next?

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shrikant
Pluralsight has already IPO'ed -- isn't that considered an exit event?

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vira28
Looks like Black Friday came too early this year !!!!!!

