Salesforce snubs SAP with Rypple flip

Salesforce snubs SAP with Rypple flip

Summary: Salesforce taking a swipe at SAP by acquiring Rypple? Lots of things to speculate upon.

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As I was boarding a transatlantic from Boston my Tweetstream went crazy with the news Salesforce.com is acquiring Rypple and rebranding it Successforce. Larry Dignan thinks it's a 'splash' into HR.

In the back channels, some think this is great because it gives John Wookey, who will head up the new business (and who ducked out of SAP earlier in the year) a platform to build a formidable human capital management suite. Others think it is a kick in the teeth to long time partner Workday although I'm told that Marc Benioff, CEO Salesforce.com played down the Workday competitive thing.

But it is Arik Hessledahl at AllThingsD who gets closer to reality:

Salesforce says in its press release that it plans to relaunch Rypple under the name Successforce, which to me sure sounds a lot like SuccessFactors, the cloud-based HR software outfit that software giant SAP acquired earlier this month for $3.4 billion.

Here's what I don't know

How much did Salesforce.com overpay as it surely must have? The transaction details were not disclosed, Rypple raised $13 million. In this market a number around $100 million would not cause regulatory issues for Salesforce.com and provides a good turn to investors. Make sense?

What's curious is that Benioff likes to brag about how much investors money he spends on acquisitions so this must be small but a deal he could do very quickly, especially now we know how much SAP thinks SuccessFactors is worth.

Here's what I see

SuccessFactors is a registered trademark. Successforce doesn't exist but is being gestated. SAP will close SuccessFactors before Salesforce.com closes Rypple...err Successforce.

Renaming Rypple as Successforce is one hell of a poke in the eye for SAP and especially as it comes with the sting that Wookey gets to run the show. But...this is all it is - a spoiler that gives Wookey something to do.

Benioff is making a habit of this and it is a dangerous path to tread: hire a well known personality in the tech game and then figure out what they will do. In this case make a modest acquisition our rock star can call his own. Effectively, Salesforce.com becomes an uber incubator for enterprise 'stuff' that may (or may not) pay off.

This one might backfire. I would be very surprised if SuccessFactors did not at least threaten to sue Salesforce.com for passing off on its trademark. Others think SuccessFactors would be wasting its time but I disagree. The similarity between the names SuccessFactors and Successforce is too close and obvious for my liking. If for any reason the SAP/SuccessFactors deal falls apart then SuccessFactors is directly exposed.

In the alternative, if Salesforce.com is hoping that Successforce will benefit from some sort of halo effect in the near passing off then it is going to get a nasty shock. Buyers may at times be irrational but most of the time they know what functionality they want. Rypple and SuccessFactors don't really play in the same space ergo unless someone is into the idea of social HCM bits and pieces then as opposed to a talent management suite then...?

Commenters think this is a big deal but they are forgetting a few things:

  • Rypple/Successforce...whatever..is a niche app.
  • It doesn't come close to being the foundation for an HCM suite. It may if they can redefine HCM in social terms but that's not where most buyers are at today and won't be for years to come.
  • Benioff and Co are relentlessly banging the social enterprise drum but I don't see the impact. It's not a message that resonates well in the large enterprise. This deal may confuse the market.
  • It will take Wookey and Co years to build out apps that deal with edge case requirements and as for the core? Without core HR admin you cannot (and I mean that emphatically) win the enterprise. That's why Workday is so dangerous to everyone, including SAP and Oracle.
  • All of that assumes Wookey can execute on this so called HCM vision but with what resources? Despite his well earned reputation for building design thinking led teams, where is Wookey's war chest?
  • I for one cannot hear the words quoted in the Salesforce.com press release coming from Wookey and that makes me skeptical.

So while the markets may prick up their ears and get excited, I'm not holding my breath. In fact I'm borderline bored (sic).

There's a caveat to this but it is way too complicated to consider in this post.

Topics: Enterprise Software, SAP

Dennis Howlett

About Dennis Howlett

Dennis Howlett is a 40 year veteran in enterprise IT, working with companies large and small across many industries. He endeavors to inform buyers in a no-nonsense manner and spares no vendor that comes under his microscope.

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15 comments
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  • RE: Salesforce snubs SAP with Rypple flip

    Perhaps you should have researched the fact that Salesforce already had SuccessForce as a register ed trademark.
    csteddy
    • RE: Salesforce snubs SAP with Rypple flip

      @csteddy - should have been clearer - but read what Frank Scavo says below
      dahowlett
  • Trademarks

    Not so fast. It appears SFDC applied to register the mark "successforce" back in 2007, based on their use of the mark on their website. The specimen submitted by SFDC to the US Patent and Trademark office shows the mark applying to CRM best practices (i.e. user self-help web pages). Unfortunately for SAP, SuccessFactors never protested the registration of the mark when it was published for opposition. I am not a lawyer, but I'm wondering if SAP would have grounds that the new use of the mark is not the use that SFDC claimed as its use in commerce in 2007. Either way, I believe you are right in the fact that SFDC's registration of the mark is problematic for SAP.

    Link to USPTO documents are here: http://tdr.uspto.gov/search.action?sn=78722519#

    One additional point, Dennis: if SFDC is infringing on SuccessFactors use of its mark, it doesn't matter if the SAP acquisition falls apart or not. SAP is acquiring rights to the mark, just as it is acquiring rights to all of SuccessFactors' assets.
    fscavo
    • RE: Salesforce snubs SAP with Rypple flip

      @fscavo - SuccessFactors would have no reason to protest the registration at the time given the use to which SFdC was claiming to put the TM but it all goes to complicate matters - and as you well know, you can sue for pretty much anything in the US.

      Of course in Europe, things are somewhat different and SFSF/SAP could give SFdC a much harder time.

      All good fun.
      dahowlett
      • RE: Salesforce snubs SAP with Rypple flip

        @dahowlett Not to belabor the point, but I believe SuccessFactors and SuccessForce are both registered in the same USPTO class(es). This means that even though they are different intended uses, they are in the same general class(es), which would make a lawsuit by SAP/SFSF at this point more difficult to prosecute, IMO.

        But...I'm interested in your comment about differences between US and EU law on this.
        fscavo
  • RE: Salesforce snubs SAP with Rypple flip

    SuccessForce (or whatever it's eventual name) will succeed or fail based on its functionality and its integration with SalesForce.com. Names are nice marketing tools, but enterprise customers are way too sophisticated for a name to be more important than what the product does.
    amywohl
    • RE: Salesforce snubs SAP with Rypple flip

      @amywohl So, basically brands don't matter?
      fscavo
      • RE: Salesforce snubs SAP with Rypple flip

        @fscavo Successforce and SuccessFactor are not established "brands" yet. I am with Amywohl.
        jacksojm
    • RE: Salesforce snubs SAP with Rypple flip

      @amywohl - 100% right and daft as some buyers may be, they are not that daft. I still think SFdC needs to be careful though. There's marketing, there's marketing Benioff style and there's going over the edge....
      dahowlett
    • RE: Salesforce snubs SAP with Rypple flip

      @jacksojm If you want to protect your trademark, you do it at the time you think there is an infringement, not years later. In fact, failure to protect your mark is legal grounds for defense by the infringer.
      fscavo
  • RE: Salesforce snubs SAP with Rypple flip

    Rather than the name, I'm far more interested in this statement you make: "It may if they can redefine HCM in social terms but that???s not where most buyers are at today and won???t be for years to come." ... So am I understanding correctly that you don't believe buyers are looking for social performance management or a platform that is social?
    jocelyn.aucoin
    • RE: Salesforce snubs SAP with Rypple flip

      @jocelyn.aucoin There is a world of a difference between 'social enterprise' as you see it in the CRM space and 'social enterprise' as might be envisaged inside the enterprise. The SIs will be all over this as an opportunity to sell more change management but if business leaders are savvy they wont buy into it. <br><br>Remember SFdC derives 80% of its revs from small cos. Do they need this? What about the 20% large enterprises - will they want it? Please don't quote Facebook as an example. It's an outlier as are all the other startups that Rypple names as customers.

      Benioff is placing bets and seeing what sticks - some will, some wont. I'm not convinced on this one. Also note he has to buy his way into every piece of this. How long will investors be prepared to allow that without seeing substantial returns?
      dahowlett
  • RE: Salesforce snubs SAP with Rypple flip

    I'm confused - if you're "borderline bored" why the blog? Were you short of anything momentous to write about? Or are you just saying "there's no big deal" in a lot of words?
    aicmonaghan@...
  • RE: Salesforce snubs SAP with Rypple flip

    I've heard all this stuff about a HR 'core' and if you don't have one, you are not serious. Actually, Talent apps are an ultra-low-priced commodity and until we have some genuine innovation and disruption - e.g. social hiring, task-enabled role definitions and so forth - this is just a defensive strategy from salesforce.com to hang-on to CRM customers with the progressive intro of Talent and other complementary apps. Makes sense - but boring as hell!
    Being Guided
  • RE: Salesforce snubs SAP with Rypple flip

    Some of the buzz we are hearing with the Rypple buy is that Chatter is not getting the adoption or usage that the product team has expected. Due to the lack of usage the SF chatter team has forced lots of features into this platform to see what sticks in chatter to try to get usage/adoption up ??? instant messaging, external collaboration, etc. It???s clear that chatter is loosing the usage battle vs. Yammer. As David Sacks always said, ???simplicity wins.??? But can Social Goals make everyone on chatter a contributor? Potentially, yes. Can it help get them get some users outside of Sales and Service - Potentially, yes. If this works it could be very promising for Salesforce - new users in finance, HR, Development, etc..

    As David said, Salesforce.com is a CRM company battling the largest players ??? Oracle, SAP. They are not anything but a CRM company and are still trying to figure out their Service offering, Marketing offerings. They are not concerned with HCM players like Taleo or CornerstoneOnDemand. But this will do some serious damage in the HCM space - as their platforms are outdated, and unused by employees. Taleo & Cornerstone will struggle to close deals against SAP, and they can???t go down market with their platforms. They have to figure something out on the down market strategy. Will this move help Salesforce go up market ??? yes but it will be at a team/division at a time --- also seriously disruptive for Talent Management players. Will it replace all performance reviews - for early adopters in SMB yes. The largest orgs ??? it could if the vendors in this space focus on certain features and privacy. Keep in mind these vendors have unheard of usage in enterprise software.

    The Social Performance space has been emerging for several years. It has a big buzz in the valley from some investors as a massive gap in the Enterprise Software market ??? between productivity tools??? and- talent management. It is not an HCM platform; and Wookey corrected this in a later interview. It is perceived as potentially game changing for the SuccessFactors, Taleo performance review approaches - their front end. The market has really been heating up for players in this space. And now it is going to explode with Beneioff's marketing. There are some other emerging companies on this space who need to jump in here ??? WorkSimple, Saba is trying to do something(i think too old to tackle this market), Achievers ??? is trying to brand here, but falls short (however nabbed a large round from Sequoia). Each of these players have some large customers in the Fortune 2000 ??? but as David mentions they do not have enterprise wide deployments. But like Yammer they do not need to. If you take the Salesforce big promises out of the announcements, I think everyone is saying that the space is very interesting - a new social performance piece of your social enterprise strategy. The future of the performance side of Talent Management.

    Like many mention I truly think SFDC, ORCL, SAP is all chasing each others tails - Example Salesforce buys a dinky support company Assistly for $50M, Oracle buys RightNow for $1.8B. SAP buys SuccessFactors, SalesForce buys Rypple. And successforce could truly be the worst marketing decision SFDC has ever made. I say SAP or Oracle buy Yammer in the next 6 months. And these few independent providers in this space will get inhaled by either the big players and run on their own or get gobbled buy the leftover HCM players who are trying to figure out their social strategy.
    stuckonsandhillroad