SAP goes to the The Cloud

Following a similar move from Oracle, this weekend SAP announced the acquisition of Successfactors., a vendor of cloud-based HRIS subscription services, for $3.4B.

The WSJ says “SAP is paying a huge price for SuccessFactors, showing its importance to SAP’s future. The $3.4 billion value of the deal is around 125 times SuccessFactors’ 2012 expected earnings before interest, taxes, depreciation and amortization”.

This deal is more than twice as large as Oracle’s RightNow acquisition and continues to demonstrate the ERP giants’ concern for customer defection from their traditional high-margin model.