
SAP To Acquire SuccessFactors For $3.4 Billion - tilt
http://allthingsd.com/20111203/sap-to-acquire-successfactors-for-3-4-billion/
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kabdib
I used to work there, circa 1999. It was a train-wreck (Austin-Hayne merged
with SuccessFactors, and we lost most of the SF-side engineers). Lots of
horrible, Enterprisey Java code, and a bunch of inherited Visual Basic.

I guess they got things under control. Good for them.

I'd invested about $1000 in stock before I left; I called 'em up a few years
ago (after finding out they were still around) and found out they'd done some
kind of restructuring that blew my shares into oblivion somehow. Easy come,
easy go.

~~~
antimora
How is it possible to loose $1000 of stock? I was wondering because I am a bit
concerned about my own stocks that I invested.

~~~
kabdib
Something about a transaction in 2001 that created a new corporation and
"extinguished all equity interests in the predecessor companies."

I'm sure it's entirely legal and so forth. Let me tell you about the time I
turned $10,000 into 17 shares of Oracle . . .

~~~
antimora
I still don't get it.

So it's not that you lost $1000 of SuccessFactors shares, right? It's
something you had invested in some other company which was bought by
SuccessFactors later, and during this conversion period existing shares were
restructured, or something along with these lines.

~~~
kabdib
Well, something like that -- I wrote a check for SuccessFactors shares. I have
a letter to this effect in my files.

Later, some mumbo-jumbo happened that "extinguished" the value of these
shares. I'm guessing this was some kind of IP transfer, whereupon the "old
SuccessFactors" went out of business, and the "new SuccessFactors" --
different company, same name -- arose.

Given how "old SuccessFactors" was being run, it doesn't surprise me.

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jtchang
If you've never worked in big corporate environments you probably are
scratching your head at WTF SAP is. Though to be honest most people who have
worked with SAP still struggle explaining what SAP is.

I personally think SAP is a ridiculously overblown and complicated piece of
software. It is just asking for a bunch of smaller companies to come in and
slice and dice it apart. However there is huge value in going with a single
provider for all your logistics needs.

I see this move by SAP as wanting to shore competition up. If SAP integrates
this into their product then I'd be happy. The product will get better. If
they don't...well...who knows what will happen?

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AndyNemmity
"Though to be honest most people who have worked with SAP still struggle
explaining what SAP is."

Completely untrue. People that work at SAP are just like people working in
startups or anywhere else. This is just made up fantasy. They can explain SAP,
although at times perhaps only their area of expertise.

"I personally think SAP is a ridiculously overblown and complicated piece of
software."

It isn't a piece of software, it's many pieces of software.

Some of those are complex, others are not.

"I see this move by SAP as wanting to shore competition up."

What does that even mean?!

The reality is as simple as you'd imagine. SAP is buying SuccessFactor because
it doesn't have extensive experience in Cloud based delivery models, and would
like to add their experience and infrastructure to SAPs.

Just like they did with Sybase, and Business Objects. This is completely
obvious, and nothing in your comment made a lick of sense.

~~~
nahname
"People that work at SAP are just like people working in startups or anywhere
else."

{ sarcasm: "Yes, a company that spends more on marketing and 'bribes' is just
like a start up and the people that work there are too." }

~~~
gujk
Startups spend their money on marketing and 'social media'....

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mbesto
SAP guy here (well I work in the industry). I know Enterprise Software is not
highly regarded here on HN, but this is pretty big news considering the
onslaught of Workday and SalesForce.com to enterprise software.

What is interesting is how SAP manages to handle disruptive technologies to
its existing portfolio. Does large enterprise now use SuccessFactors or SAP
HCM (via NetWeaver Portal/ESS/MSS)?

For anyone interested in the theories of the Innovator's Dilemma this is an
awesome example.

~~~
neeleshs
Ex-Successfactors guy here. It is indeed going to be an interesting thing to
watch. Successfactors was innovating big time in terms of usability and
flexibility on their ESS/MSS suite during my tenure there.

~~~
teyc
Share an example. I work in an enterprise sw co and I want to learn from their
success.

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teyc
haha. I don't see why all the angst here. The place I work at also has a big
VB legacy code base that has to be moved to the cloud.

Furthermore, a lot of these large companies start off with a MVP hastily
knocked up from 4GL tools and spend a lot of time doing customer development.
(remember lean?)

Eventually they get big enough to be able to afford proper software
engineering processes.

Gianforte of RightNow, a big enterprise player, started off in his bedroom
with a list of possible features and lots of phone calls.

~~~
neeleshs
I've no idea why your first comment was downvoted. I've seen SAPs HCM
interfaces and SuccessFactor's. The SF one definitely looks cleaner, more
responsive (Web 2.0, Ajax and all). This is purely my own opinion. It may not
be the case with all products of SF, but definitely the ESS/MSS modules. and
you are absolutely right, these businesses lean more towards customer
development, and hopefully, probably, catch up on other fronts(processes, eng
quality etc) later. When I was there, SF had a pretty reasonable dev process
and a reasonable codebase.

~~~
teyc
HN community tend to have a knee jerk response against enterprise software.
They forget that Steve Blank of "4 Steps to Epiphany" made his fortune in
enterprise software.

~~~
itmag
It's probably code-allergy. Most of us have probably worked on enterprise code
in some Office Space esque company at some point or another...

What I am interested in, however, is ideas on how to disrupt/fix enterprise
software via startups.

~~~
teyc
That is only because a lot of the developers don't have a sense of
appreciation of how far the state-of-the-art has progressed.

The previous developers who put together the code aren't totally clueless
people. Unless we wish for our own work to be brushed off in the same way we
did to our predecessors. Future developers are going to laugh off at the
cheesy way we develop our mobile and tablet apps.

Some of the original code had to work under onerous memory constraints, and
have all manners of workarounds for various platform incompatibilities. Think
IE6 hacks, pre-AJAX code when a sizeable portion of browsers could not script.

Do I think enterprise software as it is today can be disrupted? Yes, I do. But
do I think the enterprise software vendors and developers are clueless? No,
absolutely not. Many of them have adopted agile processes and are as fast as
any other developer. If you want to disrupt enterprise software, you need to
disrupt the sales channel, like what Salesforce and SuccessFactors did.

~~~
itmag
_Do I think enterprise software as it is today can be disrupted? Yes, I do.
But do I think the enterprise software vendors and developers are clueless?
No, absolutely not. Many of them have adopted agile processes and are as fast
as any other developer. If you want to disrupt enterprise software, you need
to disrupt the sales channel, like what Salesforce and SuccessFactors did._

Go on, I am very interested :)

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tryitnow
Has anyone used either SAP or SuccessFactors and thought "wow, this is really
great!"?

I use SAP (in finance) and it's pretty craptacular in terms of user
experience. It's generally counterintuitive and obscure. The problem with
enterprise software is that the end user doesn't buy it, the buying decision
is made by IT departments and executives who generally don't have to interact
with the product on a daily basis.

It seems to me that the only hope for enterprise is software companies that
are almost more service than software. Unfortunately, most businesses need
something other than a cookie cutter solution and let's face it, that's what
you get from most of these big companies, even the SaaS.

One solution is for business oriented programmers to come in and create
customized solutions. Believe me, there is definitely a business case for
paying a a few good hackers to create customized solutions and manage those
solutions on an ongoing basis.

~~~
mrich
> One solution is for business oriented programmers to come in and create
> customized solutions. Believe me, there is definitely a business case for
> paying a a few good hackers to create customized solutions and manage those
> solutions on an ongoing basis.

You just described the job of an SAP consultant :)

~~~
kabdib
This.

At SuccessFactors, I once spent about a month figuring out how to install
PeopleWare. Somehow word of this leaked out, and I started receiving many cold
calls from consultants offering "help" doing the install.

[Installing PeopleWare is, by the way, not for the faint of heart. I would
start bad-mouthing it here, but then I wouldn't be able to stop. Let's just
say that its craptacularness is fractal]

To buy something like PeopleWare, you pay several hundred thousand dollars and
you get a disc in the mail. You throw away the disc and hire a roomful of
consultants, each of whom arrives with their own discs full of better versions
and customizations and so forth. Three years later you have PeopleWare
running.

SAP, same deal (what I hear).

I will never work with Enterprise software again.

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dotBen
I think one thing any founder or shareholder of a "cloud-based" startup can
take away from this is that the Big SaaS Co's are getting itchy feet and are
needing to invest (read:buy) some bleeding-edge cloud technology to feel that
they still have skin in this game. There might be some good exit opportunities
here.

SAP buys SuccessFactors, Salesforce buys Heroku, etc.

These companies have money, difficulty hiring a-game talent and a lack of
industry foresight. You can help them and they'll no doubt pay handsomely for
it.

~~~
pinaceae
no.

SAP is not SaaS, yet. They have an offering, Business on Demand, but the
Netweaver core is not SaaS, it is classic on premise.

Salesforce is biting into them. Microsoft right now has a strong campaign for
cloud ERP, spearheaded by CRM. Oracle is peddling Oracle On Demand.

SAP is trying to protect their belly with this move.

~~~
sunchild
A huge part of the ERP business model is on-premises install/config. By
leaving implementation to others, traditional ERP vendors avoid the risk of
actually getting it to work properly. They're accustomed to selling a box of
tools and pointing you to an army of consultants who will gladly take a shot
at making it work. By the time you have anything to test, SAP has long since
cashed your license check and booked their revenue.

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cadr
Has anyone here _used_ SuccessFactors? My company implemented it, but it just
never really got traction. I'd be interested to hear if anyone had any success
with it (no pun intended...)

~~~
dekayed
We use it for year-end reviews. It is pretty telling that every year before
the reviews start, our HR department apologizes for still using
SuccessFactors.

We have also tried to do more year-round tracking on the progress of business
objectives, but that hasn't caught on either.

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AndyNemmity
This is an excellent acquisition. SAP has been unable to deliver as well as
they hoped on their "on-demand" promise, and this is a step towards that.

My belief is that they are purchasing SuccessFactors more for their experience
with the cloud based delivery model, than for their actual software.

Which is a great thing I think. Instead of trying to homebrew a cloud which
isn't your core business, you buy a group who that's their bread and butter,
and you integrate them with your guys, and make a real SAP cloud (on demand)
solution.

And if their software isn't terrible, that's icing on the cake. Perhaps
there's something to take away there, I'm just not familiar with it.

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hello_moto
One of SF products is written in Ruby on Rails. Interesting. Seems like an on-
going trend that Big Co. are using Rails for their newer projects (I believe
BusinessObjects were looking for a few Ruby on Rails talent as well not too
long ago for their new products).

[https://performancemanager4.successfactors.com/career?career...](https://performancemanager4.successfactors.com/career?career_ns=job_listing&company=sf&navBarLevel=JOB_SEARCH&rcm_site_locale=en_US&career_job_req_id=12652&selected_lang=en_US&_s.crb=fFQ0ex0EJEgNLe4lpgjRxaAZH50%3d)

~~~
allertonm
SAP Streamwork and parts of the BI On Demand offerings are written in jruby /
rails.

(I used to work at SAP on Streamwork, which was done at the former Business
Objects development centre in Vancouver.)

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petercooper
_SuccessFactors, a cloud-based maker of human-resources software_

Excuse my entirely naive level of questioning, but to someone who's pretty
ignorant of the 'enterprise' world, are they essentially an enterprise-level
equivalent of a 37signals or similar?

They say they have 15 million subscribed users, while 37signals merely says
"millions", so perhaps 37signals is worth $450m+? Or is there something about
companies like SuccessFactors (perhaps big contracts, lock in clauses, or
higher rates) that could lead to such large valuations?

~~~
hello_moto
That's 15M _paying_ users right there.

37Signals says "millions" of users, active, inactive, paying, and free.
Numbers probably way lower than that (10% of paying users?)

~~~
jonknee
No, that's 15M people who work for companies who are paying users. SF claims
to have 3,500 customers.

~~~
hello_moto
Correct me if I'm wrong. Enterprise SaaS usually charge by the seat (with a
few asking for discounts). So at the end of the day whether it is 3.5k
customers or 15M users. They all pay.

That is my point.

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isthmus
What does this mean for their competitors? Taleo, Kenexa, etc.?

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Maro
For reference, SAP's market cap is $70B.

