SAP buys e-commerce company Hybris to move into CRM market

SAP is moving into the CRM market with its purchase of Hybris, a Swiss customer relationship management (CRM) supplier

SAP has announced an incursion into the CRM market with its intention to purchase Hybris, a Switzerland-based customer relationship management (CRM) supplier.

Bill McDermott (pictured), co-CEO of SAP, said, in an analyst telephone briefing: “We will take over the CRM marketplace.”

SAP said customers will have a choice of on-premise or cloud deployment of the acquired company’s technology.

McDermott and fellow CEO Jim Hagemann Snabe said: “Hybris puts SAP on the leading edge of the consumer economy.

"SAP has made a decisive move to raise the stakes in customer relationship management and define the next generation customer experience."

Hybris was founded in 1997. It offers what it describes as “a complete omni-channel commerce platform that incorporates web, mobile, call centre and store” ways to shop. It uses master data management to unify commercial processes. The company’s majority investor is HGGC, a private investment firm based in Palo Alto, California. It has 500 customers, including General Electric, Thomson Reuters and Toys r Us.

SAP intends to run Hybris’s technology on in-memory database Hana. The two companies already have joint customers, including Nespresso, a coffee and coffee machines maker.

Hagemman Snabe said 106 of Hybris’s customers are already integrated with SAP. “We will go further, adding mobile applications into the mix, and cloud – a lot is on-premise now. And you can get radical reduction of costs with Hana.”

Upon completion of the transaction, expected in the third quarter of 2013 and subject to regulatory approval and other closing conditions, Hybris will operate as an independent business unit and will retain its existing management team led by CEO Ariel Lüdi and president and co-founder Carsten Thoma.

McDermott said SAP is paying a "fair price, consistent with high growth assets", but the deal figure was not disclosed.

Lüdl said: “Complexity has increased tremendously in the last three to four years, with new channels, and larger data volumes.”

SAP’s McDermott added: “This is a defining step in our evolution to be a B2B2C company.

“And it is not about email CRM.” Hana will enable Hybris to achieve real-time customer intimacy, he said.

“For CEOs it all starts with the customer: ‘How do I go direct to my consumer? On any channel, any device?’," he said

“We will unleash our will on the CRM marketplace.”

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Thanks for reporting this information, Brian! Bill McDermott's quotes display confidence and optimism, but these statements over-generalize SAP's apparent strength within the CRM community. I believe that rather than monopolizing the existing social CRM market, there should be a larger focus on market analytics and business intelligence. The time and money spent to acquire existing platforms could be used to develop secure mobile apps, as well as integrating predictive analytic functionality. Cloud-based office suites offering SCRM like GreenRope, have solidified their importance within today's technologically progressive environment, introducing key functions to assist any business regardless of their size. Furthermore, it's become apparent that the SCRM platform utilized must accurately translate the collected unique data, targeting potential consumer trends.


Some thoughts from Intershop on its blog about the acquisition:

The recent announcement by SAP that it is to acquire hybris software has certainly created a lot of industry speculation over the last few days. I’ve been asked my thoughts about the ERP giant swallowing up one of the e-commerce platform leaders and have enjoyed many pointed questions on the social networks too!

The move creates a very exciting opportunity for Intershop and its customers. Here’s a summary of the main points raised in conversations I’ve seen, had and heard:

Validating the market. As if it were needed, an acquisition like this truly validates the role of multi-channel commerce in the enterprise and will no doubt make the rest of the IT world sit up and pay attention.

Independence Day. Intershop continues to offer individual fit for purpose e-commerce solutions and now becomes the only independent all-round e-commerce solutions supplier. The feedback we’re getting certainly suggests that this agility and flexibility is critical to B2B and B2C end users.

Vendor Lock-in. Customers seem very keen to avoid ‘lock-in’ by just one software/IT vendor across their organisations, as it can generalise their ability to perform, kills innovation and often send costs spiraling out of control. It’s worth mentioning here, that Intershop has deep experience and integration expertise with SAP but also with our other ‘competitors’ including IBM and Oracle.

Agility. E-commerce giants like the SAP/hybris entity will become cannot be as agile in their approach to e-commerce. Specialised vendors such as Intershop have the expertise, eco system and flexibility to adapt to ever-faster market changes without the cost and complexity of having to re-platform.

Jack-of-all-Trades, Expert in None. A powerful ecommerce solution needs to be more than just another feature of a large enterprise suite – it needs the deep understanding of a dedicated e-commerce vendor to understand the market requirements, especially for the rapidly growing but complex B2B markets.

All Change for Partners and Employees. The IT sector, both inside and outside of the e-commerce space is littered with examples of super vendors swallowing up specialist companies and effectively killing off that expertise and success. It’s so common place that it tends to create a great deal of unease among the acquiree’s employees and partners, which can disrupt customer relationships and service.

Innovation and Investment. Unfortunately, another side effect of a big fish consuming a smaller more specialist fish, is that investment, R&D and innovation in that area often disappears too. In a fast-moving, dynamic market like e-commerce, that is very bad news indeed.