1000RA Salesforce Acquires Rypple and Enters Collaborative HCM Space

What is Happening?  On Thursday, December 15, 2011, salesforce.com announced that it had signed a definitive agreement to acquire Rypple, an emerging Cloud-based provider of “social performance management” solutions – with a plan to rebrand the solution “Successforce.” Heading up the new business unit is John Wookey (who joined the firm in early November – after previous stints at SAP and Oracle), as EVP, Advanced Applications. We caught up briefly with Wookey late last week while he was en route back home to California, from Rypple’s headquarters in Toronto, Ontario. This Research Alert summarizes that conversation, and our take on the acquisition.

Why is it Happening?  Salesforce.com has been on an acquisition binge for several years now (see Note 1) in support of a broadened vision for the company – beyond its Sales and Service Cloud roots – as it repositions itself as an enterprise-class platform / development player and Social Business provider.  The acquisition of Rypple (www.rypple.com) is yet another visible expansion of this strategy, as it helps to move the company into adjacent solution areas that align with its vision of the “social enterprise.”

As noted, Saugatuck’s Bill McNee briefly caught up (on the phone) with John Wookey late in the afternoon on Friday, December 16^th – and had a chance to get his views on the acquisition, his emerging role in the company and some preliminary thoughts on salesforce.com’s goals in expanding its enterprise solution portfolio. Find below some notes from the call:

Bill McNee: Why Salesforce?

John Wookey:

• “What brought me to salesforce.com is Marc Benioff’s vision around the ‘social enterprise’ – a few months back he and I caught up, and it looked like a good fit."
• “Salesforce.com is itself a very collaborative culture – we are very much living the social enterprise vision.”

Bill McNee: Why Rypple?

John Wookey:

• “Interestingly, it was Facebook (as a client) that helped connect salesforce.com with Rypple.”
• “With the acquisition of Rypple, our initial focus will be on performance management – but this is only the first step in our longer-term vision of supporting a variety of important business processes, around the company’s evolving vision for the social enterprise.”

Bill McNee: What’s Next?

      John Wookey:

• “We don’t need to create a core HR system of record or payroll per se – although these are important systems. Instead, we will focus on processes (HCM and other) to help align people in a social context. Performance management shouldn’t be a once-a-year activity, but a process of continual feedback.”
• “This same principle will be applied to other business processes that are heavily people-centric.”

Unlike some analysts who are predicting that this signals salesforce.com intent to aggressively enter broader enterprise markets related to core systems of record, Saugatuck walked away from the conversation with Wookey that the focus and mission of his new organization will be around buying and building solutions that will help companies “embrace social enterprise principles” for their core management processes – especially those that involve highly collaborative business processes.

Wookey emphasized that this is an ambitious mission, “even though our initial steps and investments are carefully measured.” Two highly collaborative work processes that Wookey cited as examples include budgeting and planning (among others), where there is a significantly large and collaborative user population, and that could translate into a correspondently large business opportunity.

Market Impact  At a broader level, however, the recent acquisition of SuccessFactors by SAP, combined with moves by IBM, Oracle, Dell and Salesforce.com (among others), clearly point to a rapidly evolving enterprise landscape – and the need by today’s Master Brands to be well positioned for success as large enterprise customers move much more aggressively into the Cloud 2012-2014. Over the past two months, Saugatuck has participated in several CIO Summits run by CDM Media. . . . CLICK HERE TO READ THE FULL RESEARCH ALERT