Cloud Cover For Rivals: SAP Snaps Up Concur
Cloud Cover For Rivals: SAP Snaps Up Concur
Germany's well known software company SAP has announced that it will be purchasing the US expenses software company Concur for USD 7.3 billion in cash. Predictably, this acquisition following close on the heels of HP's purchase of Eucalyptus Systems, is also in the area of cloud computing. Cloud computing has become the most desirable area of excellence in the IT and software industry in recent times. SAP's long since avoidance of this niche but popular area was sapping up its avenues of growth till it made up its mind to acquire Concur.
SAP specialises in software design for companies and industrial corporate groups which already have their own network for computing. Rivals are now offering services through the Internet via cloud computing and this has brought SAP into the thick of the storm as it were.
As per a Reuters report, SAP is increasing its online products and capitalizsing on the firm's strength in the travel sector through this acquisition. What can be added to this is that the US firm also has a strong foothold in the American market and this is always an area where foreign companies have been looking for a way in. American IT is a big pull for the best minds. Even Silicon Valley could only come about in the US. SAP now picks on these strengths to boost its presence in the international markets.
The German software company has also indicated that it would provide $129 per share for Concur. This is a premium over the closing price. It may be short of the record high Concur shares achieved in the beginning of this year, but it has many advantages for the software firm which is now going to work with a parent company of SAP's calibre.
SAP is no stranger to cloud computing acquisitions. It purchased cloud procurement software maker Ariba in 2012 and it is now at par with many of its competitors including HP, Amazon and Oracle. What the future holds for SAP will now include a component of cloud compting as well. Analysts quoted in the Reuters report are indicating that Concur being a leader in the industry, the resulting synergies will be true value for money as far as SAP's fortunes are concerned. Money does not grow on trees but SAP is hardly a sapling in the field of IT and software.
This established company competes with global rivals on their own turf and this time around, its advantage SAP. The German software giant will finance the acquisition via a credit facility agreement of around 7 billion Euro or USD 9 billion. Cloud computing is the latest “in”thing and SAP is not willing to be left behind.
Its raining dollars in this area of the IT business which just keeps growing with software pioneers such as Workday and Salesforce at the helm. With this acquisition, SAP gets 50 million cloud users as compared to its earlier tally of 38. As far as corporate profits grow, there's strength in numbers and this is where SAP gets to reach the pinnacle, come rain or shine.
