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SAP Sets the Stage for New XM Frontier With Qualtrics Acquisition

by Pamela Berard, Senior Editor, SAPinsider

January 29, 2019

SAP has taken a giant step forward in setting the stage for the future of the experience economy. Last week, SAP announced that it had completed its acquisition of Qualtrics International, the global pioneer of the experience management (XM) software category. Ryan Smith will continue to lead Qualtrics, which will retain its current leadership and operate within the Cloud Business Group at SAP. The acquisition combines Qualtrics’ experience data with SAP’s operational data, enabling customers to manage supply chains, networks, employees, and core processes better with a unique end-to-end experience and operational management system.

Customer experience appears to be a growing priority among SAP’s customers. According to SAP’s Q4 2018 Quarterly Statement, released Tuesday, Jan. 29, in the fourth quarter SAP C/4HANA customer experience solutions achieved triple-digit growth in cloud subscription revenue year over year. Segment revenue in Customer Experience was up 52% to €349 million year over year (up 50% at constant currencies). The Callidus acquisition is reflected in those segment numbers. SAP completed the acquisition of Callidus Software last April. Other recent acquisitions in the customer experience space include the acquisition of CoreSystems in 2018 and Gigya in 2017. SAP has significantly upped its customer experience game. Here is why the Qualtrics acquisition (and others) are important:

  • The Qualtrics acquisition seems to validate the importance of experience data.
    • Operational data tells you “what” is happening, but experience data can tell you “why” it is happening – an important insight today, when consumers have short attention spans and more choices than ever before.
  • Companies that can collect, manage, and act on experience data may gain a competitive edge.
  • Companies are still seeking a single version of the truth. SAP C/4HANA solutions serve a wide range of industries across both B2C and B2B and enable businesses to manage their entire front office: marketing, sales, commerce, service, customer data cloud — in real time, providing companies with a single view of their customer — across all channels.
  • Major global brands are moving forward with customer experience management — according to SAP’s Q4 reports, McLaren Group, National Geographic, Prada, Rubbermaid, and Dyson were among the companies that chose SAP C/4HANA solutions in the quarter.

In a November press release announcing the Qualtrics acquisition, SAP CEO Bill McDermott said SAP and Qualtrics represent a new paradigm, “similar to market-making shifts in personal operating systems, smart devices and social networks.” McDermott continued, “SAP already touches 77 percent of the world’s transactions. When you combine our operational data with Qualtrics’ experience data, we will accelerate the XM category with an end-to-end solution with immediate global scale. For Qualtrics, this introduces a dynamic new partner with the belief, passion and scale to bring experience management to millions of customers around the world.”

McDermott went on to say, “The combination of Qualtrics and SAP reaffirms experience management as the groundbreaking new frontier for the technology industry. SAP and Qualtrics are seizing this opportunity as like-minded innovators, united in mission, strategy and culture. We share the belief that every human voice holds value, every experience matters and that the best-run businesses can make the world run better.”

Clearly, SAP intends to compete and win with its customer experience solutions. There will obviously be a lot to unpack over the next few months as we learn how Qualtrics will be integrated into SAP’s portfolio, along with the continued integration of the other recently-acquired companies, but, in the meantime:

  • If you are a Qualtrics customer, you should reach out to your rep to learn more about how your subscription will be affected by the acquisition
  • SAPinsider is planning a report on the customer journey to SAP C/4HANA where we will benchmark customer adoption, timing, and more. If you are an existing SAP C/4HANA customer, we encourage you to participate in the research process, so we can provide comprehensive insights to the entire SAPinsider community.

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