SAP Acquires hybris

SAP has rocked the e-commerce/digital commerce world this week with the announcement of its intention to acquire hybris. Whether you believe that this is a strategy to specifically address the competitive threat of or not, SAP is not shy about its intention to use this acquisition, together with its HANA technology, to attack the retail sector. As "omnichannel" has become a hot button for several converging retail trends, the e-commerce and digital commerce space has become a hotbed of innovation. The SAP and hybris partnership seeks to raise the ante.

hybris is a Switzerland-based “commerce technology company” founded in 1997 that has recently reported terrific growth—a compound annual growth rate of 83% since 2009. It now claims some 500 customers, a reported 650 employees, and annual revenues in excess of $100 million. hybris will become an independent business unit of SAP.

SAP’s vision for hybris is ambitious. It intends to marry the hybris technology with the HANA platform into a B2B2C offering, and, SAP says, “are going to totally unleash our will like never before on the CRM marketplace and the competitors that decide to go against us.”

E-commerce and the Omnichannel Experience
What the market craves—dare we say, demands—now are e-commerce capabilities that focus closely on the customer experience and provide a simple, intuitive omnichannel experience. SAP is quite right when it says that the consumer today will expect nothing less than intimacy in its digital commerce. Consumers are increasingly demanding, and expect a near-perfect customer experience. In and across all channels, all of the time. Consumers, with ever-increasing computing power available to them, now have multiple touchpoints with retailers. Not only can consumers begin and end transactions in different channels (and expect this to happen seamlessly and transparently), but they also want the full range of channels to be available to them for the life-cycle of their  purchases.  Why should it matter where the transaction began, when it comes time for upgrading, replacing, servicing or recycling?

SAP sees HANA delivering real-time analytics to the hybris platform across all consumer touchpoints, to enhance the  customer experience. Even more than this, SAP envisions HANA and hybris empowering the merchant to be able to do more things with promotional strategies, loyalty services, etc. One can see SAP salivating at the potential of these two technologies, but we could do without yet another "game-changer" reference.

Of course, it doesn’t hurt that half of hybris’ 500 customers are reportedly non-SAP shops, and SAP talks about the opportunity for these combined technologies in SAP’s "12,000-partner network" and 240,000 customers in 25 industries. Precision retailing, in real-time. And SAP does not want you to forget about its capabilities in mobile and the cloud, either.

Still, there are surely a few questions around this, a couple of which were quickly raised on the conference call. Given that this is all about the customer experience in an omnichannel world, one cannot help but think that integration, and tight integration, is key here. SAP’s explanation about how it reconciles the need for tight integration with the fact of hybris remaining an independent business unit is not completely satisfying. SAP and hybris say they already integrated at 150 customers, and that hybris has done some work to standardize this integration. This still sounds, however, more like the status quo than leveraging the best of these two technologies for a market strategy like we have never seen before.

Also, while Jim Hagemann Snabe acknowledged that some hybris customers have “really (wanted) to control their own destiny in their own e-commerce,” he seems, in the same breath, somewhat dismissive of this while quickly jumping to the ability of SAP’s cloud technology to deliver “radical reduction of costs” and technology simplification. While Demandware, for example, has found traction in the cloud, there still seem to be some concerns about the readiness of these platforms for the cloud and vice versa.

What this means for the e-commerce field and vendors like  Demandware, eBay/Magento, IBM Websphere Commerce, MarketLive, NetSuite, Oracle/ATG, and Venda should be interesting to watch.

These and other questions will sort themselves out. It remains to be seen, of course, whether this is, as SAP calls it, “the defining step in SAP's evolution to a 'business to business to consumer' company,” but this certainly adds another dimension to the digital commerce space.
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