After the Deal: SAP Integrates KXEN
In early September, SAP announced its intention to acquire KXEN, a leading provider of predictive analytics technology. Combining KXEN with SAP’s advanced analytics and business intelligence capabilities – along with SAP HANA – is expected to provide a boost to SAP’s capabilities to help firms reap the benefits of Big Data.
I talked to Shekhar Iyer (pictured), global VP of Business Intelligence, and Predictive and Advanced Analytics. Shekhar’s responsible for the solutions/go-to-market and global sales and centers of excellence for those businesses. He is also business sponsor for the KXEN integration, with the role of making sure SAP can achieve the most benefit from the acquired company’s assets and people.
What is the first step now that the contracts are signed?
Shekhar Iyer: We have had some great help from SAP Corporate Development in the pre-merger phase and now
the post-merger Integration teams will need to quickly detail the product integration, GTM and corporate functions plans. We are making sure we can leverage all the go-to-market assets and resources and make the field very productive for the fourth quarter with our existing solutions.
What is the market opportunity now that KXEN’s technology and expertise can be used in SAP
Shekhar: Well, we have a huge market opportunity in the broader analytics space. The acquisition of KXEN helps bolster one of the three pillars of our analytic solutions: advanced analytics, which is a very hot and growing area. This will help us gain the credibility to solve Big Data problems, and it is a natural fit within our analytics portfolio, for SAP HANA, and for integration into our business applications.
Similarly, the KXEN portfolio provides data management capabilities that could greatly complement SAP’s solutions. There is going to be some fine tuning and overlap, but I expect that to be quickly resolved in the product roadmap discussions.
From which products do you expect revenue to be generated most quickly?
Shekhar: We will begin an acquire-to-ship process for the product which will take a few months. The teams are working very fast so we can sell KXEN solutions as early as January of 2014. I think the most important thing is getting the product roadmap details so that our customers are clear about our future prospects and existing
customers that have bought SAP solutions or KXEN solutions know what is coming and how this is going to add extra value for them.
Is there any specific industry that SAP will target?
Shekhar: The application areas are across all industries, but where KXEN has been very successful has been in the financial, telecommunications, retail, and e-business areas. This complements where SAP has been successful with its predictive analytics solution, namely in consumer products and retail.
What’s the market been saying based on the announcements made so far?
Shekhar: We have just had an overwhelmingly positive response, with comments like “Now SAP is a force
to be reckoned with in predictive analytics” and “This is just a great fit that adds the value that KXEN brings in predictive that will really help SAP.”
What’s the reaction been from KXEN employees?
Shekhar: The KXEN employees are excited to be part of SAP. They see the opportunity to realize higher revenue through SAP’s large distribution channel. This single motivation alone is huge.
What happens to the KXEN colleagues now?
Shekhar: The KXEN employees are now part of the predictive analytics team. They will help accelerate the skills SAP needs, providing invaluable presales and services resources for our customer-facing activities.
During the integration, it is important that they feel welcomed, and are made aware of the tremendous opportunities at SAP. KXEN has about 56 people distributed between San Francisco – where it is headquartered – and Paris and a few other locations. So it is a good fit geographically, especially on the R&D side, due the close proximity to SAP’s business intelligence and analytics development teams in Paris. Similarly there are KXEN colleagues in go-to-market and sales functions based in San Francisco, in proximity to SAP’s offices in Palo Alto. We are, however, currently in no rush for the KXEN employees to move office.
What is the future role of KXEN CEO, John Ball and the other senior leaders?
Shekhar: John will help ensure a smooth transition. He is also responsible for analyst relations and public relations activities, and for ensuring that that transition and integration, also of customers, happens smoothly. The rest of the management team will help us drive growth in the markets they have deep expertise in. I really look forward to working with them all.
Any final thoughts?
Shekhar: KXEN complements SAP’s offerings in a very hot growing area, it helps us gain the credibility to solve big data problems, and it is a natural fit within our analytics portfolio. It is also a great fit to be integrated into SAP HANA, and there has already been work done in this area. And finally it is a great fit for integration into our business applications.