My daughter, Rita is about to embark on what she calls a Gap Quarter. I don’t want to steal her thunder as she plans to blog about it but it is a play on a Gap Year and what us old fogies call sabbaticals, even though few of us have experienced that concept either. It fits in with her view and that of many Millennials that experiences matter – they matter even more than physical assets and wealth accumulation. And increasingly I hear middle aged folks say let’s try things out while we are physically able to and not wait till it may be too late. So when I heard of SAP’s decision to acquire “experience management” vendor Qualtrics for a whopping $ 8 billion (in cash no less), I was not immediately dismissive.
My reaction to most big enterprise M&A is that of coming to a fork in the road – what are you forgoing by making such a large investment at such an inflated valuation? How is this positioning you in the race to tame the Enterprise Wild West? I had similar questions when Microsoft acquired LinkedIn, when Workday acquired Adaptive and when IBM announced plans to acquire RedHat.
My questions tend to be:
Have you run out of development ideas? Are there vertical white spaces you should be investing in? Are you foregoing a better series of small acquisitions? Will the integration distract you? Would your customers instead prefer better value from what they are paying you for today?
I have an advantage in understanding SAP a bit better than other vendors as I am sitting on over a thousand pages of interview transcripts and event notes from my year of research for the next volume of SAP Nation. I have to chisel than down to a 250 page manuscript due to the editor by early January.
Thanks in particular to my tour guide, Stacey Fish I have seen a remarkably different SAP than I used to know. I have seen a lot of smart, small acquisitions. But I also see how difficult they have been to integrate and homogenize. I see a number of enthusiastic customers who are pushing the envelope. I also see many who find it difficult to navigate this diverse SAP and want to be left alone and not nickel and dimed. I see a new breed of global partners unafraid to make large investments. I see plenty of others who have not evolved much and that SAP will not nudge forward
In balance, I am much more optimistic about SAP that I was when I wrote the first volume of SAP Nation. But every once in a while I will react like Dennis Howlett did this morning
“This is tragic. Empty calories. Zero content. Year old stories. Missed opportunity to address indirect access in a meaningful way.
Looking at it from my daughter’s lens, SAP has been creating an amazing set of experiences for its stakeholders. As an observer, I am enthralled. Not every customer or investor looks at them like I do.
Now SAP will have a platform to measure all these disparate experiences. Experiences matter – now help us quantify them!
(Cross-posted @ Deal Architect)