Europe’s top technology company SAP announced a $2.4 billion U.S. acquisition to help it boost revenues from its cloud platform.
Acquiring U.S. sales software firm Callidus, in a deal announced on Tuesday, will help SAP in its ambition to become the market leader in so-called front-office software used in sales and marketing, building on its strength in back-office software that is used by companies to maintain control over far-flung multinational operations.
In an interview at SAP’s sprawling campus in Walldorf, Germany, McDermott said SuccessFactors, the human resources application acquired by SAP for $3.4 billion in 2011, would be fully migrated to the cloud this year.
“This year, the entire company will be on one platform,” SAP CEO Bill McDermott told Reuters.
He described Callidus as a “tuck-in” deal that would not move the needle on revenues but that he valued for the company’s market leadership and innovation.
As Callidus was on the cloud, it would help SAP achieve a 2020 goal of having “predictable” revenues of 70 to 75 percent of the total. These grew by 1 percentage point to 63 percent in 2017.
“We did that to get another cloud revenue stream in the mix,” McDermott said.
McDermott has just completed a week of hectic corporate diplomacy in which he met French President Emmanuel Macron in Paris and dined with U.S. leader Donald Trump at the World Economic Forum in Davos, Switzerland.
The German company is midway through a strategic transition, aiming to force the pace on developing its S/4 HANA cloud platform, which now counts 7,900 customers, and wean customers off software sold under license and installed at offices and factories.
All of SAP’s regional businesses are growing at double digits, McDermott said, highlighting “hyper growth” in China.
SAP said it expected total non-IFRS revenue of 24.6 to 25.1 billion euros ($30 bln-$31 bln) for 2018, in line with the forecasts of analysts polled by Thomson Reuters.