As you’re probably aware, over the weekend, SAP announced its intent to buy SuccessFactors for $3.4 billion in cash, which represents a 10.5x multiple of consensus 2011 revenue and an 8.4x 2012 revenue. The acquisition is particularly interesting given that it happened on the heels of Oracle’s $1.5 billion acquisition of RightNow Technologies.
Both of these transactions are driven by the demand for cloud-based services, which is growing rapidly as enterprise customer adoption accelerates. As a result many Technology vendors are seeking to add cloud-computing services and required talent to support their businesses, in some cases through acquisitions with price premium.
Not coincidentally, the business strategy Saba has been pursuing in the last two years also reflect these trends. We’re focused on innovation and on the path to delivering to the market the best product roadmap, the best global operational capabilities, with the best customer roster in the industry. While our customers’ adoption to the cloud has been the fastest in the industry, we have been taking steps to prepare the entire Company – financially, technologically, operationally, and organizationally – to transition to the next-generation cloud business model and support critical-mass cloud deployment on a global basis. And we are positioned to succeed with an organically-grown, unified, open platform that is highly scalable and interoperable with HRIS, financial, and ERP systems.
We have been executing against the Saba People Cloud roadmap and are gearing up to launch the next release of the most innovative product in the market – Saba People Cloud, a unified, people-centric and Social platform designed to transform the way people work.
With that as a backdrop, I look forward to the exciting opportunities for Saba’s growth that lie ahead.