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Who are the winners and losers in SAP's acquisition of Concur?

In the end, will users benefit from SAP's acquisition of Concur? One analyst doesn't think so.

While many are praising SAP's acquisition of Concur, at least one analyst says people who use either company's...

software are losers in the deal.

"Concur's stockholders are happy. I'm not sure why anyone else should be," said Duncan Jones, an analyst with Forrester Research Inc., based in Cambridge, Mass.

Last Thursday, SAP announced it would be acquiring Concur, a provider of cloud-based travel and expense management, for $8.3 billion, making the behemoth German software maker even bigger. The Concur purchase is the latest in SAP's moves to expand its cloud portfolio by acquisition. SAP purchased Ariba, a provider of a cloud-based procurement network, in 2012 for $4.3 billion. Last year it bought Fieldglass, a provider of cloud software for managing contingent workforces, for an undisclosed amount.

The deal is expected to close in the fourth quarter or by the first quarter of 2015, subject to approval by Concur stockholders and regulatory authorities, according to SAP.

SAP's competing offering was SAP Cloud for Travel and Expense. The company declined to say what the future of that application will be.

Jones said he found SAP CEO Bill McDermott's claim that only SAP has such a complete cloud portfolio to address spend management -- one that includes Ariba, Concur and Fieldglass -- a bit curious.

"I'm saying, well, why would anybody care that you've got a complete set? To whose benefit is it that SAP has this complete portfolio of applications? They're all separate. They don't have a consistent look and feel," Jones said.

Move could strengthen SAP spend-management portfolio

Other analysts disagreed.

The move strengthens the already strong hand in spend management that SAP had gained from its Ariba and Fieldglass acquisitions, according to Holger Mueller, vice president and principal analyst at San Francisco-based Constellation Research. "They're pulling ahead of everybody in that space," Mueller said. "They're buying up the Park Avenue of spend management," he said, effectively monopolizing the category. "There's no second Ariba. There's no second Concur."

The Concur buy also gives SAP the integration with airlines, hotels and other travel providers that it could not easily build on its own. "That's a lot of work, that's a lot of value," Mueller said. It also moves SAP closer to its stated goal of having the most cloud users of any vendor. SAP users should eventually see new spend-management products from the deal, he said.

Consultant Ethan Jewett said that growth by acquisition seemed to be SAP's only alternative in this case.

"Overall I'd say it seems like a good move. SAP's strength is business process, and while they've made progress with technology cloud offerings, [those applications] have had trouble catching on at scale," Jewett said. "So growth by acquisition seems to be the next-best strategy."

Cindy Jutras, principal of Mint Jutras, a consulting company based in Windham, N.H., also called the deal a good move, one that fits the model of what SAP did with the Ariba and Fieldglass acquisitions.

"It kind of builds on the concept of business networks, and it's pure cloud," Jutras said. "I've used Concur. It's almost hard to find someone that's been in the corporate world at all, that hasn't used it."

But in the end, neither SAP nor Concur's customers benefit from the deal, Jones said.

"Existing Concur customers don't gain. They lose a vendor that's focused on them, and their space," Jones said. SAP customers will be frustrated that they spent money on SAP's travel and expense management software -- only to see SAP finally concede Concur was better than what they were building.

Customers prefer software that's integrated, shares technology, and has a uniform look and feel, he said. "Concur isn't an SAP solution. It's a Concur solution owned by SAP," Jones said. "That's not what customers wanted."

Next Steps

Read more about SAP's plan to acquire Concur

Read what companies like Concur say about being able to manage expenses on mobile devices

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