6 Things to Know About SAP's $8 Billion Qualtrics Acquisition

Media Inquiries: Contact Karen Budell, CMO

Media Inquiries: Contact Karen Budell, CMO

SAP would not let 2018 end quietly without another billion-dollar acquisition in the experience software space. Last week, SAP announced its agreement to acquire experience management provider Qualtrics for $8 billion. Experts said the SAP-Qualtrics deal underscores the need to marry operational data with experience data, a marriage that is fundamental to the future of effective data-driven marketing. CMSWire caught up with these experts when news of the deal broke.

All About Customer-centricity

Guy Nirpaz, CEO and co-founder of Totango, said SAP’s bet on customer experience with the acquisition of Qualtrics is a “big message to the market that business growth in a customer centered economy is driven by customer-centricity.” Entities need to marry operational data with experience data in order to be customer-centric, he added. Every interaction throughout the customer lifecycle in the Software-as-a-Service (SaaS) era is an "opportunity to create delight or invite defection,” Nirpaz added.

SAP was essentially an “everything platform,” but didn’t have the customer experience data to support its offerings, said Scott Webb, president of Avionos. “The $8 billion acquisition shows just how competitive the landscape is,” Webb said, “and how being able to evolve and provide top-notch customer experience is worth a massive investment — especially when the alternative is failure or irrelevancy.”

Filling the Experience Data Gap

B2B organizations that can offer experience data on the front end in addition to operational data to drive and streamline processes will likely see massive success, according to Webb. “SAP,” he added, “was essentially able to offer everything to its customers, with the exception of experience data. The addition of Qualtrics now makes SAP’s offerings that much more attractive to customers who would prefer to have their enterprise data in one place, with one vendor, working seamlessly across the entire organization.”

The combination of experience data with operational data is fundamental to the future of effective data-driven marketing, according to Andrew Frank, distinguished vice president and analyst at Gartner. “The ability to close the gap between customer insights and tactical actions,” Frank added, “is becoming an increasingly key differentiator among brands and technology providers that have struggled to deliver straightforward solutions in this area.”

Shift Toward Holistic Understanding of Customer

Frank said the SAP-Qualtrics acquisition also signals a “broadening of focus away from specific techniques for audience targeting and promotional optimization toward a more holistic understanding of customer experience and more agile application of data-driven insights.” Marketing analysts and data scientists should benefit in the deal from an enhanced ability to have more direct, measurable effects on tactical operations. This is assuming, Frank said, the requisite integrations are streamlined and transparent, which is not a trivial task.

Nothing New to See Here

Forrester customer experience analyst Faith Adams  blogged that SAP’s move may help it close possible gaps it has in the voice of the customer (VoC) arena in its C/4HANA customer experience suite, which debuted this year. In an interview with CMSWire, Adams said the quest to marry experience and operational data is not new when it comes to customer experience. “This is something we have talked about for years,” she said. “Successful CX programs are about more than surveys and marrying both types of data to drive meaningful change." Vendors in the customer feedback management (CFM)/VoC space have multiple integrations available, she added. "In fact," Adams said, "many of the vendors have been talking about this for some time — some more than others — and many vendors in this space have a lot of clients [some more than others] engaged in bringing in both types.”

Combining Feedback with Human Insights

Andy MacMillan, CEO of UserTesting, said SAP’s Qualtrics grab will help SAP better understand its customers across digital platforms and multi-channel experiences. “We believe quantifying that feedback and combining it with human insights is key to building the next generation of customer brand loyalty as companies go through digital disruption and transformation,” MacMillan said.

What’s Next: Watch Cloud, Open Source, More VoC Acquisitions

Marketers should keep their eyes on cloud-based and open-source platforms in 2019, according to Webb. “The acquisitions we’ve seen in 2018 have indicated a growth in these solutions, which are fairly easy to implement, can scale with the company and be iterated on over time, as consumers demand new experiences constantly,” he said.

Adams said other CFM/VoC vendors were acquired more quietly this year. She cited Rant & Rave being acquired by Upland Software and Concentrix’s acquisition of Convergys Analytics. “I suspect there are more to come,” she said. “I think this brings more visibility to how critical CX is.”

Originally published at https://www.cmswire.com/customer-experience/6-things-to-know-about-saps-8-billion-qualtrics-acquisition/