Commentary and analysis by Stuart Silverman, Publisher, Retail Technology Milestones (www.rtmilestones.com)
After years of dabbling in retail, SAP finally takes the plunge with an investment of $496M to buy Retek.
SAP has made a number of efforts to establish a beachhead in retail. There have been some successes and some pretty spectacular failures. While they have always been a formidable presence, competing against SAP in retail has been fairly easy by saying that they just don't understand retail. Plus they insisted that the one-size-fits-all ERP model should fit retail as well as it fits for everyone else (rude awakening!). When a CIO I know was asked recently to consider looking at SAP for a suite of retail systems, he replied that while SAP keeps on re-entering the retail market, they never seem to stay around.
However, I always knew that if they were serious about retail, they could buy themselves into the retail market. I assumed that meant buying up all the smart retail tech professionals and making a go of it. I never suspected that they would make a $500M investment.
Analysts have been talking about this year as being big with mergers and acquisitions. There's Kmart/Sears, Federated/May, and now SAP/Retek. The transaction size may not be as big, but the impact to our small community is comparable. Is SAP going to take retail seriously this time? Or will it just dumb down the functional capabilities offered to retailers? How is this going to impact the other big players in IT that have a stake in retail -- Oracle and Microsoft?
The last 15 months have seen the acquisitions of QRS, Yantra, OMI, Escalate, Trigo, Timera, viaLink, Meta Group and others -- limited scope solution companies being absorbed into larger, broader offer solution companies. Who's next?
Moderator's Comment: What will the SAP/Retek merger mean for the retail technology industry and retailers? - Stuart Silverman - Moderator