Why SAP wanted Qualtrics so badly

26 December 2018  |  NEWS

There’s something you get at Monex that you don’t get with other investment platforms. There are lots of things actually, including access to 12 markets in Asia, Australia, and North America that cover over 70% of the world’s market cap. You also get personalised customer assistance in 5 languages, plus your own relationship manager to guide you through your purchase process. We offer the ability to buy in at any scale, from thousands of dollars to less than ten.

But our biggest point of pride is our emphasis on research, which could be why the SAP – Qualtrics deal is so impressive to us. Both companies are research-driven, and according to our porings over the matter, the arrangement itself is quite sound. It was ironed out over a number of months by the two CEOs, Ryan Smith of Qualtrics and Bill McDermott of SAP. At the time of their press conference, Qualtrics was well on its IPO preparation path.

EQ meets IQ in the software management field

While Smith downplays the deal, cheekily mentioning that SAP “ … really chased it down”, McDermott gushes about its over-subscription, saying it would have been “ … the most successful IPO of 2018!” The last time Qualtrics sought private funding, it was valued at US$2.5billion. It was projected the IPO would raise US$495 million, given the company’s valuation of $4.8 billion. SAP offered Smith US$8 billion cash to forego the IPO altogether.

But why should your broker for international trading be interested in this acquisition? The crux of the deal – apart from money – was shared interest. Qualtrics is the world’s top research software for online marketing. SAP – on the other hand – is known as the world’s ERP (enterprise resource planning) guru, with an emphasis on financial software. It rivals Oracle and out-supplies it on a global scale. Both firms want to dig into the other’s sphere. SAP is venturing into cloud computing, and Qualtrics is exploring ‘experience management.’

Harnessing the power of big data

The Qualtrics vision is to use its research tools to offer companies a more holistic view of their footprint, showing them how their clients see them, partners, stakeholders, the public in general, or any other segments they may be curious about. These assessments are based on performance as well as perception, and they involve both research and analysis software, Qualtrics’ forte. The company has proven itself, both product-wise and cash-wise.

Despite revenues of US$190 million in 2016, it suffered a loss of US$ 12 million that year. In 2017, earnings went up 52% to $US289.9 million, amounting to US%2.5 million in net income, according to reports. It has stayed cash-flow positive the majority of its existence, showing sound financial policy in addition to its top-shelf tech product. Smith seems happy with the deal, while McDermott calls it the “… the most transformative thing” he’s ever been involved in.

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