For one analyst, the question isn't why SAP purchased e-commerce software maker hybris, but what took it so lo...
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"SAP has been hemming and hawing over this for years. They were aware that hybris would make a good strategic acquisition, but I think they had their head in the sand, that they could build it themselves and bring to bear a credible e-commerce solution," said Peter Sheldon, an analyst at Cambridge, Mass.-based Forrester Research Inc.
On Wednesday SAP announced its plan to purchase hybris, a maker of multi-channel e-commerce software based in Zug, Switzerland, to add to its stable of CRM software. Hybris also makes software for master data and order management, offering its applications in hosted, on-demand, and on-premises models. Hybris is one of the top four providers of e-commerce software, along with IBM, Oracle -- via its acquisition of ATG and Endeca -- and Demandware, according to Sheldon.
The move fills gaps in SAP's e-commerce lineup, Sheldon said. The company’s e-commerce Web Channel Experience Management application, which sits on top of the SAP CRM platform, didn't go anywhere, he said. "They simply came to the realization that the strategy just wasn't working."
Terms of the deal were not announced, but once the transaction is completed, hybris will operate as a separate entity.
Is SAP muddying the waters or delivering choice?
The move helps SAP shore up its strategy of being a "business to business to consumer" company by acquiring a company with consumer-facing e-commerce bona fides, SAP co-CEO Bill McDermott said in a call on Wednesday, adding that the new software, which will soon run on the HANA in-memory platform, will prove tough for rivals to beat.
"No competitor comes even remotely close to the flexibility and the power of hybris. And when you power it up by SAP HANA, it is truly a game changer, putting enterprises in real time with their consumers," McDermott said. "CEOs today, they're working very hard to enable a 360-degree customer relationship. They're leveraging sales ... services, marketing and e-commerce across all channels, and this has to be done with intimacy because today's digital consumer will not tolerate anything less."
While SAP executives touted the range of deployment models between hybris and SAP's own portfolio, one analyst wondered whether SAP was just confusing customers in the end. "It's sort of a situation where they're trying to take a tack that customers want a choice of deployment models, and they're talking a really good game around real-time customer experiences, which in theory they can back up through HANA capabilities,” said Jon Reed, an independent analyst and founder of JonERP.com. "[But] they need to be careful not to come off like a car dealer ... You want cloud? You can do cloud. We've got the HANA Enterprise Cloud, we've got cloud CRM. You can do it on-premises," he said.
Reed noted that the market seems to be moving increasingly to cloud-based CRM applications. "If that's the case, then you can see why SAP would want to reframe it as a CRM discussion into one of a more hybrid discussion, since that's where they're going to be much stronger," he said of SAP's strength in on-premises CRM software compared with its cloud-based CRM.
Whether SAP customers who want to move to the hybris cloud will need new licenses will also have to be addressed, Reed said.
What's the overlap between SAP and hybris?
The two companies' software shares some functionality, particularly in price, promotions and campaign management, as well as product information management, Forrester's Sheldon said. "These are all things that exist in SAP CRM that also exist in -- and are maybe even better --within the hybris platform." SAP CRM and ERP customers will gain from the acquisition, now that they no longer have to look outside SAP for "best in class" e-commerce software, he said.
"They won't need to mix and match IBM and SAP, Sheldon said. "They can get a single integrated solution. For SAP customers, this is a very strong positive."