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Inside Virsa: SAP, customers win with acquisition

SAP's acquisition of compliance vendor Virsa Systems Inc. will result in vertical functionality and a set of software developers that could make software that SAP folds into the SAP portfolio, according to columnist Joshua Greenbaum.

The results ... will provide a better compliance, risk management and governance environment for SAP's customers.
Joshua Greenbaum
principal consultantEnterprise Applications Consulting

The recent acquisition of Virsa by SAP highlighted a number of important issues, from the growing value of compliance, risk management and governance to the value of being an SAP partner. The former issue speaks to why customers should be excited about this acquisition, the latter issue is why everyone else in the SAP community should be excited as well.

It's no secret that compliance, risk management and governance are hot topics across every one of the 28 industries that SAP services. What's less well-known is that these three issues aren't only focused on regulations like Sarbanes-Oxley. These three issues also pertain to the day-to-day operations of every company that worries about its top and bottom line. Adhering to internal "regulations" is just as important as watching out for the SEC, the FDA, the DOT, and all the other three-letter acronym regulators around.

What didn't get as much play in the Virsa deal is that this notion of internal and external compliance, risk management and governance plays very well into Virsa's strength as a platform as well as an out-of-the-box solution. Indeed, SAP's plans for its new acquisition include moving beyond the general-purpose, horizontal Virsa offering that SAP has been so successful selling into more industry-specific offerings based on the Virsa platform.

This is all good for customers, who see most of the standard solutions as being all about cost-avoidance – as in the cost of seeing your CEO doing a perp walk for the SEC. That's always a good idea, but SAP/Virsa has an even better one: How about using compliance, risk management and governance to contribute to the bottom and top line of a company?

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This inside/outside view is very much based on using Virsa as a platform for ISVs and developers looking to solve other, non-regulatory issues in compliance, risk management and governance. That's why everyone else should be excited about the deal. SAP is planning to use Virsa as a sub-ecosystem on which new products can be based, and will be going out to the software community to find partners willing to develop to this new platform in coming months.

The result promises new, vertical functionality for users, and an avid set of software developers eager to try their hand at not just making software that SAP customers can use, but potentially making software that SAP deems important enough to be folded into the SAP portfolio in a Virsa-like acquisition.

This latter promise of an acquisition will add fuel to the ardor of the ISVs and developers already eager to tap into SAP's growing user community. And the results of their labors will provide a better compliance, risk management and governance environment for SAP's customers. A win for SAP, a win for its customers, a win for its partners. It's hard to find a sweeter all-around deal than that.

Joshua Greenbaum is a market research analyst and consultant at Enterprise Applications Consulting. He has more than 15 years of experience in the industry as a computer programmer, systems analyst, author, and consultant. Prior to starting his own firm, Enterprise Applications Consulting, he was the founding director of the Packaged Software Strategies Service for Hurwitz Group, which focused on technology, infrastructure and business issues in the enterprise applications market.

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