SuccessFactors Inc.
SuccessFactors Sidebar:
A Rousing M&A Strategy
SuccessFactors CEO Lars Dalgaard explains why the company’s recent spending is warranted.
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Jonathan Sprague
Since early 2010, SuccessFactors Inc. (NYSE, NYSE Euronext: SFSF) has spent more than $340 million — including $165 million in cash — to buy four competitors that can each bring different areas of expertise to the company’s cloud-based business software offerings. To put that in context, SuccessFactors booked $206 million in revenues in 2010 and is not yet profitable. Still, CEO Lars Dalgaard says, the spending is warranted. In fact, he credits these deals, along with organic growth, for SuccessFactors’ nearly 50 percent rise in revenue during the first half of this year.
By fortifying the range of software solutions it can bring to customers, SuccessFactors can “convince buyers that a single end-to-end solution provider is the safest choice,” says Josh Bersin of Bersin & Associates. For instance, its purchase of Inform in July 2010 broadens the company’s expertise in workforce analytics. This software is aimed at giving senior managers the tools to make better, more fact-based decisions. Cubetree, Jambok, and Plateau were bought, says Dalgaard, to reinforce SuccessFactors’ offerings in the white-hot area of employee learning. Dalgaard says SuccessFactors now offers a “supermarket” of talent management software to customers.
