SAP, the world's leading provider of business-management software, will buy online software supplier SuccessFactors for US$3.4 billion in a deal that will help accelerate the German company's expansion on the mainland.
Based in the German city of Walldorf, SAP yesterday announced its takeover of SuccessFactors about three weeks after it unveiled in Beijing a plan to invest more than US$2 billion to boost its operations in the world's second-largest economy.
SuccessFactors, which was founded in San Mateo, California, delivers software for human capital resources management over the internet. The firm is the first of the major so-called cloud-computing-services specialists to push for the establishment of its own data-centre operation on the mainland.
'The cloud is a core of SAP's future growth, and the combination of SuccessFactors' leadership team and technology with SAP will create a cloud powerhouse,' said Bill McDermott, co-chief executive at SAP. 'The acquisition will help us address the top priority for CEOs globally - managing people and talent.'
Cloud computing allows companies to buy, subscribe to, and receive from a digital hub on the internet a range of lower-cost software, information, and other shared resources - hosted at a remote server - as a service that is on demand, just like electricity from a power grid. 'Cloud' is used as a metaphor for the internet, which is depicted as such in computer network diagrams.
SuccessFactors applied to mainland authorities several months ago for permission to establish a data centre in Shanghai, from which it will deliver software online, to support its growing number of domestic customers. The company currently runs eight data centres, most of them in the United States.