SAP to Acquire Concur, Expense Management Software Provider
September 26, 2014
By Ed Silverstein, TMCnet Contributor
The large software maker from Germany, SAP (News - Alert), plans to acquire Concur Technologies, an expense management software maker.
The deal will likely close in Q4 of this year or Q1 of 2015 after approvals are given by shareholders and regulators. The transaction was valued at $7.3 billion, with an even higher value, when including debt, of $8.3 billion.
With the deal, SAP will see the number of cloud users jump to 50 million from 38 million. Consider, too, that already some one third of Concur users use SAP software and SAP will add Concur customers, according to news reports.
The move also reflects a wider trend in the marketplace. Spending on cloud services worldwide will likely increase 20 percent this year to $174 billion, according to projections from IHS (News - Alert). The firm further projects that by 2017 cloud spending will total more than $235 billion, which is triple the amount seen in 2011.
"The acquisition of Concur is consistent with our focus on the business network," SAP CEO Bill McDermott was quoted as saying by Reuters (News - Alert).
Concur now has 23,000 customers. They include businesses, government offices and large universities. In addition, there are more than 25 million users of its business expense and travel management software and services, Reuters said.
The deal is also important for SAP because the company will get “deeper access to an area of corporate finance where it is not dominant,” Reuters said. "SAP now has a business network that is 75 percent bigger than Amazon, eBay (News - Alert) and Alibaba combined," McDermott explained.
The deal is important for the sector as well, as businesses look for solutions to save them money and improve efficiency. Telecom expense management typically saves customers a lot of money. For instance, Emptoris, an IBM (News - Alert)-owned provider of strategic supply, category spend and contract management solutions, lets procurement organizations improve performance, save money, lower risks, improve compliance and improve their financial performance. Its solutions can be used on-premises or by a software-as-a-service approach.
Edited by Rory J. Thompson