SAP Strikes $2.4 Billion Deal To Acquire Sales Performance Software Developer Callidus, Plans Front-Office Application Push

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Once the acquisition is completed SAP will consolidate all CallidusCloud product assets with its Hybris ecommerce and omni-channel applications as part of SAP's Cloud Business Group. The SAP Cloud Platform will be used for the technical integration of CallidusCloud software and the existing management team will continue to lead CallidusCloud, SAP said.

SAP has made a number of significant acquisitions of cloud software companies, including acquiring talent management application developer SuccessFactors in 2012 for $3.4 billion, procurement network vendor Ariba in 2012 for $4.3 billion, and travel expense management software vendor Concur Technologies in 2014 for $8.3 billion. But the company has been relatively quiet on the acquisition front in recent years.

The acquisitions have certainly added to SAP's momentum in cloud software, which was evident in its fourth-quarter and 2017 financial results, in which cloud subscription and support revenue grew 26 percent and 20 percent, respectively.

SAP also reported strong growth in sales of its flagship S/4HANA application suite, with the number of customers adopting the product growing to 7,900 by year's end – up 46 percent from one year earlier. But slowing sales among the vendor's legacy software products pulled down overall revenue growth for both the fourth quarter and the year.

"This company is firing on all cylinders," McDermott said during an earnings call Tuesday morning. "On top of an outstanding 2017, we are moving forward with great confidence."

"We now target approximately 25 billion [Euros] in total revenue in 2018 including continued fast growth of around 30 percent in the cloud even at larger scale," McDermott said. He also noted that in 2018 SAP's cloud revenue is expected to overtake license revenue for the first time.

For the fourth quarter ended Dec. 31 SAP reported total revenue of 6.81 billion Euros (U.S. $8.45 billion), up 1 percent from 6.72 billion Euros (U.S. $8.35) in the fourth quarter of 2016. After-tax profit for the quarter was 1.87 billion Euros (U.S. $2.32 billion), up 22 percent from 1.53 billion Euros (U.S. $1.89 billion) one year earlier.

That included cloud subscription and support revenue of 955 million Euros (U.S. $1.18 billion), up 20 percent from 827 million Euros (U.S. $1.03 billion) one year earlier.

But revenue from traditional software license sales and support was down 2 percent in the fourth quarter to 4.81 billion Euros (U.S. $5.97 billion) from 4.93 billion Euros (U.S. $6.12 billion) in the same quarter one year earlier.

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