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SAP acquires OutlookSoft for performance management

SAP announced Tuesday that it will acquire performance management software vendor OutlookSoft.

SAP announced Tuesday that it will purchase performance management software maker OutlookSoft Corp.

Based in Stamford, Conn., the privately held OutlookSoft boasts approximately 700 customers. Although terms of the deal were not disclosed, Paul Hamerman, vice president of enterprise applications with Cambridge, Mass.-based Forrester Research Inc., pegged the price at about $200 million.

OutlookSoft's performance management product has a Microsoft Excel-based user interface and integrated planning, financial consolidations and business performance analytics capabilities, according to Hamerman. It represents a big improvement on SAP's current performance management product, Strategic Enterprise Management (SEM).

"SAP needed to address the gap it had in planning functionality," Hamerman said. "SAP had a product, but it wasn't great and it was losing out to best-of-breed competitors such as Hyperion and Cognos."

SAP rival Oracle recently acquired Hyperion and, just weeks ago, BI software maker BusinessObjects purchased Cartesis. Combined with Microsoft's plans to address the market with its pending release of PerformancePoint Server, SAP was under the gun to make a move.

"This is a great move for SAP, and the timing was good," Hamerman explained. "SAP had to make a move, because retooling their offering would've taken too long."

Along with the recent purchase of Pilot Software, this is an example of SAP's "tuck-in" acquisition strategy, where the company buys smaller vendors to fill weak spots in its technology.

This stands in contrast to Oracle's history of acquiring larger vendors such as Hyperion and PeopleSoft to both gain technology and instant market share.

"OutlookSoft meshes well with SAP's recent Pilot Software acquisition, as well as the reseller agreement with Acorn Software," Hamerman said. At Sapphire 2007, SAP announced it would resell Acorn's Profit Analyzer software as the SAP Business Profitability Management application by Acorn as part of its performance management offerings.

OutlookSoft will solidify SAP's position in its current accounts, and may allow the company to compete for new customers against the best-of-breed vendors, according to Hamerman.

"SAP is really focusing on the performance management area and building [its] portfolio," Hamerman said. "This acquisition is icing on the cake."

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