German software giant SAP has been looking for ways to bolster its cloud revenues. Recent reports say that SAP’s vision of cloud software sales outpacing its traditional software sales by 2020. Since that news has broke, SAP has decided to bust out the checkbook and buy Concur for $7.4 billion.
Concur is one of the leaders in corporate travel and expense technology. Inside of the Concur app, employees can instantly upload receipts into the cloud which will allow their expenses to be paid or reimbursed by the company. Concur also allows organizations to get specific deals through partner agreements which allows certain organizations to get better deals on preferred airlines and hotels for employee travel. Concur is popular among large scale enterprises because it consolidates all of the travel and expense related tasks for both users and administrators all on one screen.
SAP paid more than 28% more than Concur’s stock price in the deal. News sources are reporting that SAP is borrowing the money to finance the transaction. SAP’s main competition looks to be Oracle, who has also been noted as spending $50 billion in related acquisitions.
Brent Thill, analyst at UBS, mentions that the aggressive nature of organizations such as SAP could “accelerate the pace of Mergers & Acquisitions in cloud software.”
Bill McDermott, CEO at SAP, said on Bloomberg TV that “This is one of the fastest growing software-as-a-service businesses in the world.” McDermott also said, “here is no No. 2 to Concur — they essentially own this market.”
Since SAP now owns Concur, SAP has a virtual lock on world’s largest corporate travel & expense Software as a Service play. Bernd Leukert from SAP highlighted SAP’s commitment to cloud by saying, “There’s no debate anymore in the IT industry that the cloud will be the preferred consumption model.” SAP is moving swiftly to acquire market share in cloud software and many experts are wondering if SAP is planning to move quickly on buying out another corporate SaaS leader in the near future.