Coverage: SAP is buying Qualtrics for $8 billion

SAP SE has agreed to purchase Qualtrics International Inc. for $8 billion in cash, the companies announced Sunday.

Mike Murphy of MarketWatch.com had the news:

Qualtrics, a Utah-based software company, had filed for an initial public offering in October hoping to raise about $200 million.

Bill McDermott, chief executive of German-based software giant SAP, said Sunday the deal would bolster its offerings.

“We continually seek out transformational opportunities — today’s announcement is exactly that,” McDermott said in a statement. “Together, SAP and Qualtrics represent a new paradigm, similar to marketmaking shifts in personal operating systems, smart devices and social networks.”

In a statement, Qualtrics CEO Ryan Smith said “SAP will help us scale faster and achieve our mission on a broader stage. This will put the XM Platform everywhere overnight.” The XM Platform is Qualtrics’ experience-management software for feedback and data analysis.

Larry Dignan of ZDNet.com reported that the two companies will combine operations data:

With the move, SAP acquires a company that has a survey platform and focuses on both customer and employee experiences. Qualtrics product suite covers everything from customer analytics to retention to employee engagement and exit interviews. The data from Qualtrics is compiled in dashboards to quantify experiences.

The appeal for SAP is relatively obvious. SAP has operational data and touches other areas such as HR, CRM and ERP that will complement experience data.

In a statement, SAP CEO Bill McDermott said his company touches 77 percent of the world’s transactions. Qualtrics experience data will round out the data set. The ultimate goal for SAP is to have enough data touch points to create unique algorithms for various industries and scenarios.

Tom Krazit of GeekWire reported that Qualtrics will maintain its office in Seattle:

SAP, best known for its database and enterprise-resource-management software, will pay $8 billion in cash for Qualtrics, which will continue to maintain its dual headquarters in Seattle and Provo, Utah. Qualtrics offers software-as-a-service that companies use to measure and manage their reputations with current and prospective customers as well as a similar service for internal use managing employees.

It’s another sign that legacy enterprise technology companies are willing to shell out cash in order to get in on a newer and growing market, similar to IBM’s $38 billion purchase of Red Hat two weeks ago. SAP believes that the combination of Qualtrics’ experience in managing user experience data will mesh nicely with its customers’ trove of operational data, like inventory and sales history, it said in a release.

Qualtrics co-founder and CEO Ryan Smith will have to wait a little longer before becoming the head of a public company, which was widely expected to happen some time this week after it announced plans for an IPO in October having raised more than $450 million in funding. He will remain in charge of the company, and Qualtrics will maintain its brand inside SAP’s Cloud Business Group.