A lot of money was spent on this bad acquisition. I wonder what's next to sell?
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a good start would be CK and HP employee pass.
What?
Even worse yet, HCM lifers who came in via Successfactors with Zero enterprise knowledge are now IAE’s and E-CSP’s calling the sh--s at VERY LARGE ENTERPRISE ACCOUNTS that won’t consider S/4 HANA until JIT for 12/31/2027 ECC drop off general maintenance support. More shuffling deck chairs on the titanic
2021 annual report of Qualtrics
Revenue: 1.07 B$
Cost of Revenue: 285 M$
Expenses - R&D: 324 M$
Expenses - Sales & marketing: 643 M$
Expenses - General & Admin: 877 M$
Total Costs & Expenses: 2.13 B$
NET LOSS: 1.06 B$
Total stock-based compensation, including cash settled: 1.06 B$
As a result of the SAP Acquisition, our stock-based compensation expense reflects the recognition of both equity-classified awards and liability-classified awards. Liability-classified awards are settled in cash in accordance with SAP’s employee equity compensation programs. Our stock-based compensation expense for the year ended December 31, 2021, 2020, and 2019 consisted of $1,057.1 million, $224.0 million, and $876.2 million of liability-classified and equity-classified awards. During the year ended December 31, 2021, 2020, and 2019 awards of $79.4 million, $388.6 million, and $312.8 million were settled in cash. Liability-classified awards are recorded according to mark-to-market accounting.
Emarsys next?
This is from Successfactors 10K, reporting period 2011. The company was acquired by SAP in Dec 2011.
We have a history of losses and we may not achieve or sustain profitability in the future.
We have incurred losses in each fiscal period since our inception in 2001. We experienced a net loss on a generally accepted accounting principles in the United States of America ("GAAP") basis of $12.5 million for fiscal 2010 and $36.0 million for fiscal 2011. At December 31, 2011 we had an accumulated deficit of $267.3 million. The losses and accumulated deficit were due to the substantial investments we made to grow our business and acquire customers.
Qualtric shares are now approx 1/3 of IPO price. It has been a good investment for SAP … made money on diversturr and IPO versus the other ~70 acquisitions. Time to sell. Sure.
Qualtrics is however another example where SAP took the focus off customer requirements to sell a low cost, low transaction value product. 👏👏👏
Thoughtful post. I don’t have your experience - legacy SAP on-prem HR/ payroll.
Sad to read your observations. Likely historic DE versus the world. Same as Ariba acquisition with Waldorf pushing SRM and later S/4 procurement capacities.
I don't necessarily think that acquisitions were a bad idea in concept, but it's the execution post acquisition that needs to be examined. SuccessFactorss was a great company before SAP bought it, but it's now languishing among management that doesn't know anything about HR and therefore doesn't invest in it at the rate it needs to. Meanwhile, nimble competitors are eating SAP's lunch. You have to water a plant after transplanting it to a bigger pot.
Sadly nothing. The vast majority of the acquisitions were 4th or 5th tier products.
The CX space is a wreck. Almost all acquired products can’t be sold.
After that we can look at Ariba and Successfactors. At present these could likely be valued about their acquisition price. SAP P/E return to historic range may result in loss in their sale.
Another very large acquisition, Business Objects, really what’s left. How many customer remain and will stay on this legacy solution? Likely worth significantly less than acquisition price.
Harvard case studies will be written about the company’s failure.
a good start would be CK and HP employee pass.