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SAP Moves To Cloud With SuccessFactor

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By Douglas A. McIntyre Published
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SAP (NYSE: SAP) will buy cloud computing company SuccessFactor (NYSE: SFSF) for $3.4 billion. It is a move that will get the Germany company into a business dominated by Microsoft (NASDAQ: MSFT), Google (NASDAQ: GOOG), SalesForce (NYSE: CRM), Oracle (NASAQ: ORCL) and IBM (NYSE: IBM). In other words, SAP is late to market.

SuccessFactor is unique because much of what it does is in the human resources sector. But, its revenue is fairly low–only $91 million last quarter, and it losses money. That opens SAP to the criticism that it bought a company which its rivals had passed over because of valuation. SAP paid $40 a share, which is close to the all-time high of SuccessFactor’s stock.

SAP, of course, cannot afford to stay out of cloud computing. Firms like Cisco (NASDAQ: CSCO) have released data that shows cloud server farms will dominate show large company store and have access to data.

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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