Salesforce snubs SAP with Rypple flip

Salesforce taking a swipe at SAP by acquiring Rypple? Lots of things to speculate upon.
Written by Dennis Howlett, Contributor

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.

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