SAP Watch

May 5 2010   8:06PM GMT

SuccessFactors wins Walmart deal

CourtneyBjorlin Courtney Bjorlin Profile: CourtneyBjorlin

We learned this week that SuccessFactors landed a huge deal with Walmart for human resources-related applications.

First Siemens, now Walmart, who’s next, Oprah?

When SuccessFactors went public three years ago, it boasted two million users and 1,400 customers. The largest deployment was 85,000 seats, according to numbers provided by the company.

In three years, SuccessFactors now counts more than 8 million users, 3,300 customers and, with the Walmart deal, its largest implementation yet of 2.1 million users.

We all know the advantages of SaaS — low upfront costs, ongoing operating versus capital expense, ease of deployment, ease of use, lower administrative expenses, etc., etc., etc.

But something in particular stood out from my conversation with Success Factors CMO Paul Albright the other day. He said the company’s customers are negotiating discounts on the maintenance and support deals from their primary on-premise vendors, and spending the savings with SuccessFactors.

“Siemens renegotiated on maintenance, got that down substantially, and standardized its operating platform on SuccessFactors,” he said.

Those maintenance bills are supposed to be down payments on future product innovation. We know some customers aren’t buying that, or at least don’t think it’s worth the price SAP and Oracle are putting on it.

What’s more, they aren’t waiting around to see if it eventually will pay off.

SuccessFactors is riding this wave of dissatisfied customers who are looking to get more from their expensive enterprise applications. A growing majority of its deployments aren’t rip and replace deals of SAP HCM, or related modules in ERP, or PeopleSoft, Albright said. Customers integrate the software to aggregate the data in those systems and present it an interface that people want to use.

“We don’t see SAP as a competitor,” he said. “We see ourselves a complementary approach, extending the value of [the applications} and getting the data in those systems unlocked.”

SAP is working on loads of on-demand initiatives. And to be fair, its application portfolio promises to cover far more ground than SuccessFactors.

But you can’t buy what isn’t there, and the Walmarts of the world are less and less willing to wait.

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