Startup tech companies have become an integral part of SAP’s business. One and a half years ago, SAP reached out to Plum.io’s co-founder and CEO, Caitlin MacGregor, regarding her startup company. They were looking to invest in her psychometric assessment firm.
Plum was one of the startup tech companies eyed by SAP’s strategies—partnering with companies and avoiding acquisitions.
Plum.io was founded in 2012 and had already built a solid base of SMB customers. MacGregor initially said “no” to the offer, but SAP would not give in to getting “no” as an answer. However, MacGregor gave her response with concern for the future of her company and worried about closing doors to other partners and not getting much in return.
SAP persisted with the partnership, and MacGregor relented. Plum is now a part of the two-year-old program that incubates and funds early-stage startups, SAP.iO. MacGregor shared that the venture provided Plum with security certifications and integrations into SuccessFactors. Additionally, they were also able to increase their growth.
SAP uses a different strategy from its peers
At the recently concluded SAP SuccessFactors conference held in Las Vegas, the integration of the Qualtrics acquisition was the central theme, so was SAP’s strategy with HR partnerships like Plum.
A total of 13 acquisitions were made by SAP since 2015. It was more than half of the number of startups acquired by IBM and Oracle during the same period.
Stephen Spears, chief revenue officer at SuccessFactors, shared that SAP.iO is utilised as a way to invest in startups that offer the functionality needed by customers.
Referring to acquisitions that can stifle the creativity and productivity of the startup acquired, he said:
“It’s just a fact of life. there is a sense of strangulation that occurs regardless of how good I do the post-merger acquisition.”
He further pointed out that the firms acquired are considered critical movements to adapt to changes in the market. For example, the acquisition of Qualtrics puts importance on measuring employee experience, customer experience, and others that can measure satisfaction.
Despite the acquisitions, SAP exerts effort to avoid acquisition strangulation. Spears pointed out that Qualtrics’ leadership, personnel, branding, company culture, headquarters, and its perks, like free lunches, were maintained.
A look at one of the partner startup tech companies
Censia Inc., a talent acquisition platform based in San Francisco, was also one of the startup tech companies that SAP has partnered with.
SuccessFactors reached out to Censia to join its partner network following customer requests for its integrations with SuccessFactors. The company partnered with SAP in January. By June, the integrations went live.
Jo Riley, co-founder, and CEO of Censia shared:
“There are a lot of different skills that mean very similar things. There are a lot of job titles that mean the same thing.”
Censia improves searches for talent and eliminates bias. It consolidates information from more than 2,000 sources, which also include LinkedIn profiles and other data sources, and standardises it into one version of the truth.