SAP Adds Khimetrics To Assets

A privately held company in Scottsdale, Ariz., Khimetrics makes software that supercharges a retail environment by providing insight into the most profitable way to price and position products on the shelf. The result: improved margins, increased demand, better profitability forecasts and more customer retention, said Rick Chavie, senior vice president of industry solution management for the retail and wholesale sector at SAP AG, Walldorf, Germany. SAP did not disclose the purchase price.

Khimetrics software is a natural extension to the SAP for Retail product and will be immediately integrated when the deal closes in January 2006, Chavie said.

“There&'s very little overlap. We have the whole end-to-end supply chain capability, they bring the modeling of how customer behavior works in stores,” he said.


SAP's purchase of two retail software makers this year were complementary:


>> SEPTEMBER: Triversity manages POS and inventory tasks
>> NOVEMBER: Khimetrics examines retail customer behavior.

The addition of Khimetrics will open the door for more SAP partner opportunities, Chavie said. “We see more opportunity, particularly for the consulting partners. We obviously can&'t operate alone, and we want to get this [retail SAP partner] ecosystem really revved up,” he said.

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Khimetrics brings to SAP a respectable installed base, with customers that include retail chains such as Albertsons, Lowe&'s, 7-Eleven, Sterling Jewelers, ShopKo Stores, and others. SAP shares some of these same customers and will now have better reach into the ones it does not, Chavie said.

The acquisition of Khimetrics extends SAP&'s ability to compete with Oracle, said Manuel Villa, CEO of Via Technology, an SAP consultant in San Antonio. “[SAP] has looked at what Oracle has done in the retail space and is making its own move,” Villa said.

Earlier this year, SAP bought Triversity, a Canadian maker of retail inventory management software. In March, SAP almost bought retail management software maker Retek, but lost a bidding war for Retek to rival Oracle.

Villa said the overall rash of acquisitions in the retail space could have “buyer beware” written all over it. “The bottom line is, I don&'t think it&'s good for the customer. First and foremost, with acquisitions, the options go away. Instead of five vendors to choose from, I have two, and suddenly licensing rates go up as competition disappears,” he said.