SuccessFactors gets social: Buys CubeTree; Lands 2.1 million seat Wal-Mart deployment

SuccessFactors gets social: Buys CubeTree; Lands 2.1 million seat Wal-Mart deployment

Summary: SuccessFactors said Monday that it will acquire CubeTree for $50 million in a deal that will allow the company to integrate social software into its 8 million seat installed base, which now includes all of the employees of Wal-Mart.

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SuccessFactors said Monday that it will acquire CubeTree for $50 million in a deal that will allow the company to integrate social software into its 8 million seat installed base, which now includes all of the employees of Wal-Mart.

CubeTree's price tag includes SuccessFactors stock worth $20 million and a $30 million cash payment three years from the closing of the purchase.

The combination of SuccessFactors and CubeTree is notable. SuccessFactors is a dominant human resources planning and business execution software as a service player. CubeTree does social software. Since SuccessFactors touches every employee at some companies, CubeTree could drive social enterprise adoption quickly.

Carlin Wiegner, CEO of CubeTree, said that selling out to SuccessFactors made sense given the potential to be integrated with an installed base of 6 million seats. Toss in the recent deal with Wal-Mart to add 2.1 million employees to the SuccessFactors customer base and SuccessFactors could make a lot of enterprises social quickly.

Here's what CubeTree brings to the table:

  • Collaboration and sharing;
  • Employee profiles;
  • Team workspaces;
  • And executives dashboards.

Just a note about that Wal-Mart deal. SuccessFactors didn't say Wal-Mart was the customer that standardized on its SaaS platform. The company just noted that it was the largest retailer, an existing customer. Since Wal-Mart is a large retailer that just happens to have 2.1 million employees it's safe to connect the dots. In fact, it's an unnamed customer rule that's a bit silly.

In any case, when you couple CubeTree's social software, the scale of customers like Wal-Mart and SuccessFactors the results could be interesting. Many SaaS players---notably Salesforce.com with its Chatter effort---are getting social.

Paul Albright, chief marketing officer for SuccessFactors, said CubeTree will accelerate the company's roadmap. CubeTree, the second acquisition in SuccessFactors history, will be integrated into the company's BizX suite. "All applications that will run across the company must have ways to engage employees better," said Albright. "When bridging the gap on strategy and getting results the experience employees have must be a good one."

In other words, Albright is arguing that navigating enterprise software should be as easy as something like Facebook.

Meanwhile, CubeTree has a prominent partnership with SAP. Wiegner said he wouldn't comment on that partnership today.

For the fiscal first quarter, SuccessFactors reported revenue of $43.8 million, up from $35.2 million a year ago. Non-GAAP earnings were a penny a share with a net loss of 6 cents a share. Wall Street was looking for break even results on revenue of $43.6 million.

As for the outlook, SuccessFactors projected revenue of $45 million to $45.5 million with non-GAAP earnings of break even. Wall Street was looking for break even results on revenue of $44.6 billion.

For fiscal 2010, SuccessFactors projected revenue of $180 million to $182 million with earnings to be break even. Wall Street was expecting earnings of 2 cents a share on revenue of $183 million.

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Topics: Emerging Tech, Cloud, Collaboration, Data Centers

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