Why did Qualtrics grow so quickly
SAP CEO Bill McDermott is serious about his announcement that he wants to redefine the customer relationship management (CRM) market. After the takeover of Callidus Software for 2.4 billion dollars at the beginning of the year and the presentation of C / 4HANA, a CRM suite that was repackaged from its own and purchased products, in June 2018 the next bang followed: The largest German software company announced to take over the US software manufacturer Qualtrics. The thrust of this strategy is clear. SAP wants to stand up to the industry leader Salesforce, which has dominated the market for years.
Qualtrics, founded in 2002, describes itself as a pioneer in experience management (XM). From the software provider's point of view, companies are concerned with four central aspects of experience: customers, employees, products and their own brand. With the Qualtrics "Customer Experience" software, companies could find out how customer needs are changing, which customers are important for their own business and how potential customers can be won over by their own brand. Those in charge promise that users always have the entire customer experience in view and can react accordingly and improve points of contact in a targeted manner.
In addition, according to the provider, the "Employee Experience" tool is used to better handle crucial moments in the employee cycle. This increases commitment, counteracts fluctuation and also strengthens team spirit.
With "Product Experience" Qualtrics wants to help users to better exploit the potential of their own products. Especially in times when markets are changing faster and faster, it is becoming more and more important for companies to position their own products optimally on the market, they said. The tool measures user experience and forecasts product usage and market adoption. With "Brand Experience", organizations would have brand awareness, brand value and brand perception in view, could evaluate them qualitatively and accordingly control the appearance of their own brand more precisely.
Combine operating data with experience data
"Together, SAP and Qualtrics will define a new standard, similar to how markets have changed through personalized operating systems, mobile devices and social networks," commented SAP CEO McDermott on the acquisition. "Now when we combine our operational data with the experience data from Qualtrics, we will immediately create a new XM category with an end-to-end solution with global reach." The experience data and insights from Qualtrics together with the extensive operational data from SAP systems enable customers to better control their supply chains, networks, employees and core processes, promises SAP.
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With a purchase price of eight billion dollars, the acquisition of Qualtrics is the second most expensive acquisition in the history of SAP - after the acquisition of Concur, a cloud specialist for travel and travel expense management, for 8.3 billion dollars around four years ago. The purchase price for Qualtrics is to be paid in cash. Those in charge of both companies have already approved the deal, as have the investors in the US cloud provider. Subject to regulatory approvals, the deal is expected to close in the first half of 2019.
Cloud provider Qualtrics is in the black
The XM specialist has raised a total of around $ 400 million from investors in various financing rounds since 2012, including Accel, Insight Venture Partners and Sequoia Capital. In the last round in April 2017, the company was valued at $ 2.3 billion. By October 2018, those responsible for Qualtrics had pushed the preparations for an IPO. The software provider reported revenues of $ 190 million in 2016, in 2017 it was $ 290 million and for the current year the management expects a turnover of almost $ 400 million. After a loss of 12 million dollars in 2016, the provider was in the black last year with an increase of 2.6 million dollars - not a matter of course for a cloud provider.
The company, which is based in Provo, Utah, and Seattle, Washington, has around 1,300 employees and more than 9,000 customers worldwide - including well-known names such as Allianz and Volkswagen. The provider is currently represented in 13 countries, in Germany with an office in Munich. SAP will help Qualtrics grow faster, said Qualtrics CEO Ryan Smith. "The XM platform is suddenly gaining enormous reach." According to SAP, the previous management structure, employees, brand and corporate culture of Qualtrics are to be retained. The acquisition will in future belong to the SAP Cloud Business Group. Ryan Smith will keep his position as CEO. The corporate headquarters in Provo and Seattle were also retained.
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From the point of view of the SAP managers, the added value in the acquisition of Qualtrics for customers lies in being able to link their own operational data from the SAP systems with the experience data from the Qualtrics applications. Users received information about how customers and employees rated their own company and its products, and could then immediately initiate suitable measures via the connection with the operational systems such as CRM and HR.
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