SAP buys SaaS specialist Qualtrics for United States dollars 8 bln

Marco Green
November 15, 2018

Qualtrics offers comprehensive market research and data analysis cloud software that complements SAPs offerings.

SAP announced on Sunday that it was acquiring IPO-bound startup Qualtrics for $8 billion in cash.

Qualtrics Customer Experience™ is used by the world's most iconic brands to optimize the customer experience and predict the actions that will have the biggest impact on their bottom line.

"Our mission is to help organisations deliver the experiences that turn their customers into fanatics, employees into ambassadors, products into obsessions and brands into religions". SAP already touches 77 percent of the world's transactions. It now has almost 2,000 employees.

The CEO of Qualtrics, Ryan Smith stated that he is more at peace regarding the acquisition than going public. "Like rival Oracle, SAP has been busy using its cash flow to add onto its core business software offering". "The Smiths owned 48% of total voting control, according to the IPO prospectus", writes CNBC's Alex Sherman. SAP believes that the combination of Qualtrics' experience in managing user experience data will mesh nicely with its customers' trove of operational data, like inventory and sales history, it said in a release. The two shared mutual customers such as Under Armour. "We could not be more excited to join forces with Bill and the SAP team in this once-in-a-generation opportunity to power the experience economy".

"I feel more at peace about this than going public", Smith tells Konrad. "We need to make it easier for people to be here, because we have all the makings to make this a major tech hub". Adding that the company had no need to go public as it has no investor, employee or financial pressure, Smith further stated that the sole objective for the company going public was to create the category and that nothing would be bigger for that goal than this combination. "It would take 10 years to do what we are going to do tomorrow".

Smith is something of a fixture in a Utah startup scene that encompasses Ancestry.com, Insidesales.com and recently listed Domo Inc. Prove, Utah-based Qualtrics filed for an IPO last week.

"You do not forget your first meeting with Ryan Smith", Sequoia Capital partner Bryan Schreier wrote in a blog post, they report. "A go-to-market savant, Ryan complements his brother's understated-engineer mindset". It had earned $289.9 million in revenue in 2017, up 52% from its $190 million in revenue in 2016 and reported a net income of $2.5 million, up from $12 million in losses in 2016.

But Gartner VP Andrew Frank emailed that this acquisition wasn't a directly reactive move against SAP's biggest marketing cloud competitors. Both SAP's and Qualtrics' boards as well as the United States firm's shareholders have approved the transaction, which is slated for completion by the middle of next year.

Its branding is also set to stay as it will operate as a separate business under the SAP Cloud Business Group.

"This week was the week that we were ringing the bell", said Qualtrics CEO Ryan Smith, who will continue to lead the business, which will retain its dual headquarters in Provo, Utah, and Seattle.

Other reports by Click Lancashire

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