On January 30, 2018 SAP announced that its subsidiary SAP America, Inc. has entered into an agreement to acquire Callidus Software Inc., a leader in sales performance management and CPQ software.
With a fee tag of around $2.Four bn this is the maximum steeply-priced acquisition SAP has announced in pretty a time.
With this acquisition SAP receives in the direction of the goal of assembling the ?Most complete and differentiated portfolio to control these days?S patron enjoy? And claims that the aggregate of the CallidusCloud Lead to Money suite in combination with its very own (Hybris) consumer engagement suite creates a ?Leading solution portfolio?.
SAP intends to consolidate the CallidusCloud answer set into its Hybris portfolio, with the income cloud being the technical integration issue of the software program program. As ordinary, the present management crew will stay on board.
According to the most present day Gartner Magic Quadrants for Sales Performance Management (dated 15 January, 2018) and Configure, Price, and Quote Application Suites (dated 29 January, 2018) SAP catapulted itself into the leadership position of Sales Performance Management and proper into a visionary role in the CPQ market. Forrester Research already in their Forrester Wave: Configure-Price-Quote Solutions, Q1 2017 positioned CallidusCloud into the leader phase in their wave.
With SAP?S Hybris solutions, together with Gigya, SAP already has a powerful patron engagement suite, albeit with some gaps, a giant of which were given plugged with this acquisition. While SAP CPQ is reasonably capable at the C and P there can be some deficiency on the Q. And it bases on grandfather IPC ? No longer a horrible engine, but one that is getting worn-out.
Friend Paul Greenberg’s reaction to this acquisition is:
Acquisition of @CallidusCloud by SAP was one that makes a lot of sense for both parties. Though honestly, if Salesforce had acquired Calldus Cloud, or Microsoft or Oracle, would have made sense too. A very smart acquisition by SAP, as was Gigya in 2017 #SAP #CalldusCloud #crm
According to Paul, CallidusCloud might have been an outstanding acquisition for Oracle, Salesforce, or Microsoft, too. Definitely for Microsoft, which does not have a big CPQ that I understand of. For Oracle and Salesforce this for my part is extra of a possibly, which then would possibly were extra spherical making lifestyles difficult for the opposition. Both have already got a sturdy CPQ, and each are doing well inside the Sales Performance Management vicinity. The onus became on Microsoft and SAP in this example. Now Microsoft, as within the case of e-trade, is the last one with out owning a solution.
It moreover ought to now not be forgotten approximately the best Contract Lifecycle Management (CLM) skills of CallidusCloud. CLM is an crucial addition to CPQ, as contracts are negotiated in addition to fees for product configurations, mainly in massive employer B2B environments. Just take a look at a agreement as a configurable product. While CLM does not sound anywhere near as horny as CPQ, I understand of times wherein the CLM is as essential due to the fact the CPQ itself. And it's miles one of the quantities of a deal that takes sizeable time, wherein pace and comfort, mixed in a effective tool, are essential.
CallidusCloud has been a long-time partner of Salesforce, which in 2016 acquired Steelbrick. Likely as a reaction to this, CallidusCloudCloud entered into a strategic agreement with SAP to integrate into SAP Hybris Cloud for Sales in January, 2017. This agreement had its first real tangible result in September 2017 when CallidusCloud announced the first version of an integration into SAP Hybris Cloud for Sales.
Last, however now not least, at the same time as I do not buy the ?Reinvention of the the front office?, this acquisition shows the significance of quit-to-give up processes. Integrating CallidusCloud profits enablement and CPQ into the the the front workplace software program (SAP Hybris) enables green integration into the more transactional oriented again stop. It is a part of the again workplace of the the front place of work, so to say. We are ultimate a circle right right here: There isn't any easy reduce differentiation among structures of engagement and structures of report. This is specially genuine in times of channel agnostic exchange.
My PoV and Advice
This modified into an essential, even a essential, flow into for SAP.
SAP, for quite a while, had a gaping hole in the cloud based CPQ area, which could be filled in a reasonably short area only by an acquisition. Possible targets for this have been companies like CallidusCloud, FPX, or companies dedicated to the SAP Cloud Platform, SCP, like Inmind Cloud, which is a CPQ solution built on SCP with a focus on manufacturing industries.
As stated above, this acquisition plugs a few gaping hollow in SAP?S answer portfolio. Remaining holes encompass a more plausible standalone ?Experience platform? To increase Hybris Marketing, a competitive standalone CMS and DAM, higher capability around sales contracts (e.G. Renewals), a tale across the conversion of net websites and e-trade, to call however some. Regarding the ?Revel in platform? CallidusCloud can also have a factor or which could help augmenting it.
Being included into SAP Cloud for Customer CallidusCloud?S CPQ very well augments SAP Cloud for Customer by way of way of allowing a difficult and rapid of crucial methods to an volume that in all likelihood most effective Oracle is capable of deliver: With a persevering with integration into the ERP decrease returned give up.
Further, this acquisition rounds off sorely lacking functionality within the SAP Revenue Cloud. Revenue Cloud is strong in which it includes (time and again) bill for digital products. It lacks within the potential to configure products, apart from fairly simple subscription products. In other words, it is susceptible wherein CallidusCloud is robust.
The combination of CallidusCloud CPQ & CLM and SAP Cloud for Sales is a good value proposition already now. While it may appear less as one piece than Salesforce with Steelbrick the round story delivered by this combination is able to convince customers not going the Salesforce route. With Salesforce currently being the perceived gold plated standard of all things CRM, this is quite a feat.
CallidusCloud’s ability to directly include incentives and commissions as well as give a margin health indicator for a quote may sound like a small thing but in fact is a powerful tool.
The integration of CallidusCloud into SAP is a priority for CallidusCloud for quite a while now, as is the integration of its own solutions into a coherent one. While back in October 2017 it was still visible that this integration is early stage, it also showed a huge potential. Businesses that chose CallidusCloud as the CPQ working alongside SAP Cloud for Sales now have a validation for their choice.
CallidusCloud has some
The bottom line is that for SAP customers the topic of CPQ is no reason anymore, whatsoever, to look outside the SAP ecosystem.
Also, with this acquisition SAP also bought itself a good number of net new customers, especially in the Salesforce world.
The combination of the facts above should throw some wrench into Salesforce’s gear and somewhat limit its growth options.
And growth is essential for Salesforce, which delivers good solutions, at a high price point, and with low profitability. Salesforce is not an Amazon that can sustain a low profitability situation eternally.
In closing, there is an interesting kink. CallidusCloud is built on .Net. While this supports the openness story it somewhat weakens the SCP story until there is a .Net runtime and development environment available for it. It will be interesting to observe what happens here. Reprogramming CallidusCloud on SCP is hardly an option.
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