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Summary

SAP announced January 29 that it had reached an agreement to acquire Callidus Software Inc., a specialist in the provision of what is referred to as quote-to-cash software, to support field salespeople, especially when in the presence of prospective customers. Key sales-focused components gained through this acquisition include

  • configure, price quote (CPQ)

  • sales performance management

  • a learning management system for sales called Litmos

  • a portfolio of other marketing, sales, and service-related innovations.

This acquisition significantly strengthens SAP Hybris's cloud-based customer engagement portfolio in B2B markets.

This acquisition strengthens the B2B cloud-based SAP Hybris customer engagement portfolio

While SAP has a strong B2B heritage, in recent years it has greatly enhanced its B2C credentials in the customer engagement space through the acquisition of Hybris in 2013, which gave it a leading commerce platform. Meanwhile, two of its strongest competitors, Oracle and Salesforce, each acquired cloud-based CPQ vendors. Oracle acquired BigMachines for $400m in 2013, and Salesforce acquired SteelBrick in 2015. To put this in perspective, SAP is paying $2.4bn for Callidus Software, which would be difficult to justify if the reason were just to close the CPQ gap. So what more does SAP gain from Callidus to make it worth the investment vis-a-vis these two competitors?

The simple answer is that there is more to CallidusCloud than CPQ. It has a portfolio of sales-enablement and support solutions to increase motivation, productivity, and win rates. These include

  • Sales Performance Management Cloud – to automate sales compensation, optimize sales territories and quotas, automate revenue recognition, and provide predictive analytics and machine learning

  • Sales Execution Cloud – includes contract lifecycle management and pipeline forecasting and management tools, as well as CPQ

  • Sales Enablement and Learning Cloud – to organize relevant content for sales and provide a learning management sales platform to sharpen sales skills

  • Marketing and Customer Engagement Cloud – to generate more leads through personalized email marketing; identify at-risk customers through Clicktools VoC feedback platform; and provide gamification to service agents to boost their motivation and prescriptive pricing intelligence to improve profitability of deals, including product recommendations

  • Support for a variety of B2B industries – including automotive, communications, financial services, high tech, insurance, manufacturing, and even retail.

SAP has partnered with Callidus for several years, so we can expect a rapid integration into the broader SAP enterprise applications portfolio. The intention is to keep CallidusCloud open to integration with non-SAP platforms, but once it is fully integrated with other SAP applications, existing SAP customers in the B2B space will be able to take advantage of this significantly improved combined portfolio.

Appendix

Further reading

SAP Hybris: Beyond Omnichannel to Customer-Adaptive, IT0020-000304 (August 2017)

Author

Jeremy Cox, Principal Analyst, Customer Engagement Practice

jeremy.cox@ovum.com

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