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Summary

The announced acquisition by SAP of longtime partner Callidus Software, completed April 5, 2018, gives the German software conglomerate a new set of tools and a new approach to unified, cloud-based CRM. The integration of Callidus' CPQ capabilities with SAP Hybris will contribute to rebuilding its market share in North America and around the world. It also presents a chance to plant a flag in the contentious realm of data security and privacy.

The timing may be just right for identity management

The $2.4bn Callidus acquisition is complementary to last year's purchase of identity management and access control specialist Gigya. These two pieces, added to SAP Hybris Identity, Hybris Consent, and Hybris Profile, combine to form a robust front end for customer experience. SAP's stated goal – to field a cloud-based intelligent customer experience suite – is becoming a reality. The next step is to tie it to the rest of SAP CRM for a unified front- and back-office suite, which should prove relatively easy thanks to the company's longstanding relationship with Callidus and prior integration of Gigya.

SAP is a respected worldwide brand incorporating CRM, infrastructure, middleware, and many more aspects, but it has been losing market share in North America for nearly a decade. CRM is an important part of enterprise software vendors' profiles, and SAP ranks third according to most measures, behind its rival Oracle, which is itself far behind current leader Salesforce. While it is unrealistic to think that there will be a major upheaval anytime soon, SAP stands to gain margin against Oracle, differentiate itself from the other vendors near it in market share, and, most importantly, reverse its downward trend.

In the end, the results of SAP's play are in the hands of its marketing and sales teams. SAP has demonstrated that its applications are worthy of employment – capable and flexible, with a vision that reaches beyond next year's financial results. Despite that, North America has not been friendly to the company. It may just have been handed a gift in the form of worldwide data security worries. Between high-profile misuse of data by major enterprises and the need to align with the EU's General Data Protection Regulation, SAP's access management capabilities and the company's long familiarity with Germany's tight privacy rules could be the springboard it needs to make a change. Marketers and salespeople, take note.

Appendix

Further reading

"SAP acquires Callidus Software to strengthen its customer engagement capabilities in B2B," INT001-000024 (February 2018)

"SAP Hybris puts customers in control of their data – essential for trust and compliance," INT001-000031 (February 2018)

"SAP wants to simplify enterprise digital transformation," ENS002-000016 (March 2018)

Author

Marshall Lager, Senior Analyst, Customer Engagement

marshall.lager@ovum.com

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