Yesterday, SAP AG announced its intent to acquire cloud-based procurement contingent labor and services management technology provider Fieldglass. According to the announcement, SAP has plans for combining of the Fieldglass with the existing human resource management capabilities of SAP SuccessFactors capabilities onto the existing Ariba, an SAP Company network platform.
Fieldglass falls under the category of Vendor Management Systems (VMS) and claims to be currently supporting 27,000 suppliers an upwards of $25 billion in spend among different industry settings within its category of support.
Terms for the acquisition were not disclosed and the release indicates that SAP expects to close this transaction in the second quarter of 2014 subject any regulatory or other closing conditions.
This announced acquisition is further evidence of SAP’s intent to strengthen the Ariba B2B platform around broader sourcing and procurement services needs including integrated human resource management.
From the lens of Supply Chain Matters, the fact that the press release includes multiple quotes from the SAP Executive leadership team including CTO Vishuall Sikka, provides evidence that this acquisition was looked upon as strategic intent to broaden the cloud-based functionality support for both SAP and the Ariba Network. The fact that the decision reached this level may be an indicator of how much SAP was willing to pay. The implications of this move will reverberate to other current market participants and will place further emphasis on the overall importance of enterprise and best-of-breed technology vendors having a B2B cloud-based network platform strategy.
Supply Chain Matters has been offered the opportunity to brief with SAP executives regarding this acquisition and we will provide further commentary or comments after completing that briefing. For the time being, existing Ariba and Fieldglass clients are advised to await further specific plans and strategic milestones regarding this acquisition especially regarding the technology platform implications.