SAP AG steps into cloud computing market

SAP AG steps into cloud computing market

SAP AG is stepping up its game in the cloud computing market with the acquisition of SuccessFactors for $3.4 billion.

The buyout sees SAP gain the leading developer of employee evaluation software and is expected to provide a particular boost for the firm in the Software-as-a-Service (SaaS) market.

In response to the purchase, analysts suggested that the price was particularly high. However, they also observed that the decision to focus on external growth within the cloud sector looks likely to prove successful as the industry is enjoying a boom at the moment. Indeed, a global average of 65 per cent of consumers are making use of the technology, according to a recent survey from KPMG.

Furthermore, research from IDC has predicted that around 80 per cent of new software offerings will be available as cloud services as soon as 2014, while over a third of software purchases are predicted to be made through the cloud.

SAP's co-chief executive, Bill McDermott, told Reuters on a conference call that the company is hoping to become the world's number one cloud business and hopes to achieve this without any further major acquisitions.

He added: "We're going to remain an organic growth company primarily, but where there is an opportunity, a crown jewel in the market like SuccessFactors, and where it can help us become the cloud powerhouse we want to be, you make the move."

As more big-name players expand their presence in the cloud computing market, companies themselves are likely to see the costs and options improve when they come to consider their own service requirements.

Those that are serious about expanding their use of cloud computing might want to check out their company networks first to ensure that they have the capability to deliver such services.

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