SuccessFactors, an SAP Company
Location: San Francisco
Dates: June 5-6, 2012
Top Line
This was our first exposure to SAP’s Cloud strategy and the take away is that both companies are moving quickly to try and maximize their market momentum. Interestingly, this analyst and user meeting came only a few days after SAP acquired another notable Cloud provider, Ariba, for $4.3 billion dollars. SAP has been late to the Cloud Computing market but appears to be very committed to trying to move back into a leadership position.
1) Acquisition with SAP proceeding well
Based on the analyst day reviews and discussions with employees and executives at the event the SAP governance model of autonomy, not independence, is working well. My discussions with a number of SuccessFactors employees seems to indicate that they are staying in their seats and focused on the opportunities in 2012 and into 2013.
This blog focuses a lot of our attention on how software companies can make the most of their SaaS business model and it is usually quite difficult to combine traditional and SaaS cultures. One of the most common mistakes that is often made in acquisition of all types of SaaS companies is the tight integration of those companies back into the parent firm. This often destroys the SaaS DNA, the rate and pace of innovation and there is usually a lot of attrition of key talent. As of right now, it appears that SAP’s strategy to allow SuccessFactors to operate with a high degree of autonomy is working to preserve the culture and their team.
2) Cloud-based global payroll
At the conference SuccessFactors announced a new Cloud-based global payroll solution that will initially support ten countries including US, Canada, Mexico, UK, Brazil, India, Australia, Germany, Netherlands and Switzerland. This product is based on the SAP global payroll product, and will be delivered in the Cloud as a managed service. This payroll solution will be available with SuccessFactors’ Employee Central core HR product.
SuccessFactors’ global payroll solution will be generally available in July 2012.
3) Product decisions have already been made
It was good to see that SAP and SuccessFactors during their first 90 days of the integration have made some important decisions including which products are to be invested in on a going-forward basis for the HCM and Talent Management suite. All of the SuccessFactors products for Talent Management will be the going-forward products and Employee Central and Global Payroll will be combined SuccessFactors and SAP developed products. The SuccessFactors team is leveraging the deep ERP and payroll expertise of SAP to speed these products to market to compete new SaaS competitors like Workday.
The general strategy for the combined HCM product set is based on a loosely coupled, end-to-end integration of the products. SuccessFactors was careful to emphasize an open approach that also included working with partners in areas where the suite of solutions did offer functionality.
Another interesting product decision that both companies made was to use both of their products internally. This ‘drinking your own champagne’ approach is not always successful but Jeff Diana, the company’s Chief People Officer and Shaye Cole, VP of HR Operations, have deployed a majority of their own products internally at SuccessFactors in the last 90 days. There was a really interesting video that they showed about the various deployments and how quickly they were rolled out.
What is even more interesting is that SAP, a much larger firm, is also rolling out the SaaS products that SuccessFactors provides, and the rollout appears to be going well. Cheers.
Additional Links
[video] Analyst Comments at SuccessConnect 12 (including Montclare)
[video] Lars Dalgaard, CEO at SuccessFactors Keynote at Sapphire User Meeting
[Release] Deloitte Establishes Alliance with SuccessFactors, A Global Leader of Cloud-Based Business Execution Software Solutions
[Release] SuccessFactors Launches New Social Collaboration and Mobile Tools to Engage Today’s Workforce
